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Daniel Loeb Sells 40 Million Shares of Yahoo
Posted by: Monica Wolfe (IP Logged)
Date: July 24, 2013 04:23PM
On July 22 Daniel Loeb decreased his position in Yahoo! (YHOO) by 66.77%. The guru sold a total of 41,400,000 shares at an average price of $29.11 per share. This sell comes as Yahoo! announced that they would be repurchasing 40 million shares held by Loeb’s fund, Third Point. The purchase price equaled the closing price of Yahoo! common stock on July 19.
Since this sell, the price per share has dropped approximately 3%. As of the first quarter Loeb held 5.63% of the company’s shares outstanding, but as of his most recent sell he holds 1.87% of Yahoo’s shares. Daniel Loeb now owns 20,600,000 shares of Yahoo!, keeping him as the top guru shareholder.
Daniel Loeb’s holding history of Yahoo as of quarter one:
Daniel Loeb placed a lot of time and money in his turnaround vision for Yahoo, which has shown great success thus far as his most recent sell locks in a massive $665 paycheck for Third Point. It was Loeb that helped remove former CEO Scott Thompson from his position which lead to current CEO Marissa Mayer’s arrival.
"I'm confident that with Marissa at the helm and her team's focus on innovation and engaging users, Yahoo! has a bright future," Loeb said in a statement.
According to GuruFocus Guru Trade’s information, since Loeb’s initial buy, the fund cashed out at an impressive 129% gain.
Yahoo is an American multinational Internet corporation. It is widely known for its web portal, search engine Yahoo Search and related services including Yahoo! Mail, Yahoo! News, Yahoo! Finance and Yahoo! Groups.
Yahoo has been in a period of reconstruction over the past year. Yahoo brought in CEO Marissa Mayer to reestablish the company, and since announcing her hiring the company’s shares have risen over 70%. During Mayer’s first year as CEO, she has managed a massive makeover of Yahoo, but the company still has significant room for improvement as it sits beneath an advertising environment dominated by Google (GOOG) and Facebook (FB).
Third Point plans to maintain 20 million Yahoo shares. CEO Marissa Mayer had the following to say about Loeb and Third Point:
Daniel Loeb had the vision to see Yahoo! for its immense potential - the potential to return to greatness as a company and the potential to deliver significant shareholder value. On behalf of the Board and our entire team, I'd like to take this opportunity to personally thank Dan, Michael, and Harry for the tremendous opportunities they created here at Yahoo! They have been incredibly supportive as we have built our executive staff and developed our strategy, and they have helped position Yahoo! for future success. While there's still a lot of work ahead, they've given us a great foundation.
Yahoo’s historical price, revenue and net income:
The Peter Lynch Chart shows that despite recent growth, Yahoo! still appears to be undervalued:
Yahoo! recently released its second quarter results recently which reported:
· GAAP revenue of $1.135 billion, versus $1.218 billion from the second quarter 2012 representing a 7% decrease.
· GAAP net earnings per diluted share up 68% to $0.30
· Non-GAAP net earnings per diluted share up 19% to $0.35
· Adjusted EBITDA for the second quarter was $369 million, a 7% decrease compared to the same period 2012.
You can read the full second quarter results here.
The GuruFocus analysis on Yahoo! reports:
· The revenue has been in decline over the past five years.
· The price is near a 5-year high of $29.11.
· The company has comfortable interest coverage.
· Yahoo! has seen recent expansion in its operating margin.
Yahoo! has a market cap of $30.25 billion. Its shares are currently being traded at around $27.44 with a P/E ratio of 7.90, a P/S ratio of 6.50 and a P/B ratio of 2.20. The company has seen an annual average earnings growth of 7.6% over the past 10 years.
There are 15 gurus that maintain positions in Yahoo! Click here to see their holding histories.
You can view Daniel Loeb’s current portfolio here. Also, check out the list of Guru real time picks here.
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Guru Discussed: Daniel Loeb: Current Portfolio, Stock Picks
Stocks Discussed: YHOO, GOOG, FB,