The Market Loses Faith In Yahoo! (YHOO)

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By Douglas A. McIntyre Published
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The big rally in Yahoo! (YHOO) did not last long. Modest earnings and excitement about its 40% stake in Alibaba took the shares from $26.55 in mid-October to $33.99 at the end of the month. The stock have been as low as $28.37 today, trading off 5%

Some on Wall St. think that fact that Yahoo! ratted out a journalist in China may contribute to the sell-off. It was certainly a moral lapse, but nothing to bring the stock down. CEO Jerry Yang will be flogged in Congress and the media, but he has bigger problems.

It has dawned on traders that, even if Yahoo!’s piece of new IPO Alibaba is worth $8 billion or so, the price of the newly public company cannot defy gravity for long. And, selling a 40% share of the Chinese firm is impossible. What is on paper is not always what goes into the bank.

And, today AOL posted modest advertising revenue growth of 13% over the same quarter last year. It reminded Yahoo! investors that the portal business is cruel and competitive.

Yahoo! has a three week rally, and now it is over, perhaps for a long time.

Douglas A. McIntyre

The

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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