Yahoo! Inc. (NASDAQ: YHOO)
In the late evening on Tuesday, shares of Yahoo! Inc (YHOO) gained as the board of directors reported that they are considering selling the core Internet business. Talks will begin on Wednesday and could last until Friday of this week according to anonymous sources. This is a move that investors have been waiting for, as growth has been hard to come by with so much competition in the web advertising business. Google and Facebook have been taking a large chunk of that business and continue to do so while YHOO’s main source of its market cap is mainly because of their stake in Alibaba (BABA). There has also been a lot of concern over Marissa Mayer and her ability to lead the business to new growth, which has been dismal during her tenure.
According to Therese Poletti,
“Mayer is under fire in the press and on Wall Street, with the general consensus that it’s time for yet another CEO change at the floundering Internet company, which has six CEOs since 2007.” Market Watch
If Mayer doesn’t provide some real change soon and prove her weight in gold we could see a new CEO in the near future.
With the possibility of a sale, shares gained in the late post market session breaching $36 a share after it closed the regular market session at $33.71, just over a 6% increase. We will have to wait and see where the shares open tomorrow but looking at the daily chart the $36 mark could provide a level of resistance to trade against. Right now, this is all speculation as we are not even sure if the sale will happen so for right now it’s a good idea to trade off important pivot levels and keep your stops tight. With share prices gapping up, we can expect the previous resistance level of $34 to now act as support in case the seller steps in early.
For most of the year, YHOO has been on a solid down trend that looks to have bottomed back in late September with lows of $27.20, down from highs of $50.78, where there was a few days of consolidation before shares made a nice move back to the upside when it broke free from the upper resistance of the downtrend channel. Higher lows filled in around $32 before making another push north to $36. Looking at the daily chart, there appears to be a nice reversal head and shoulders pattern forming with the base coming in at the $36 level. A break and close above this level could trigger further buying and a bounce in share prices. Keep an eye on volume around this price range as well to further confirm the move.
About Yahoo! Inc.
Yahoo! Inc. is a global technology company, which delivers personalized search, content, and communications tools on the web and on mobile devices. The company provides a variety of products and services, many of them personalized, including search, content, and communications tools-all daily habits for hundreds of millions of users, on the Web and on mobile devices. The company’s offerings to users include Yahoo.com – a starting point that brings together the most relevant content and functionality from across the Web, including original Yahoo! content. It currently offers Yahoo! Search experiences and applications across connected devices, including PCs, tablets and mobile phones. Yahoo! News provides original, premium, partner, and syndicated news via text, photos, and video to engage users with wide-ranging, up-to-the-minute coverage and analysis into topical news events. Yahoo! Sports serves one of the largest audiences of digital sports enthusiasts in the world. It is anchored by Fantasy Sports, editorial reporting, real-time scores, statistics and breaking news, coverage of the biggest global sports events, and premium college sports coverage through Rivals publisher network. Yahoo! Finance provides a comprehensive set of financial data, information, and tools that helps users make informed financial decisions. It offers mobile solutions, including dedicated Yahoo! Finance iPhone and Android applications and MarketDash for iPad. Yahoo! Entertainment and Lifestyles is a collection of properties focused on emerging trends and information in popular culture, women’s issues, and media. Yahoo! omg!, Movies, TV and Music are leading destinations for celebrity gossip, movie, music, and TV premieres, and awards coverage. Yahoo! was founded by Jerry Chih-Yuan Yang and David Filo in January 1994 and is headquartered in Sunnyvale, CA. MarketWatch