The latest rumor, which has been confirmed by Verizon Communications Inc. (NYSE:VZ) CEO Lowell McAdam is that his company has an interest in making an offer to acquire Yahoo (NASDAQ:YHOO). While no deal has been reached as of yet, the two sides are certainly talking. What exactly would this move mean for Verizon an their shareholders?
An acquisition of Yahoo by Verizon could be good for all those involved. It would give Verizon a new means of mobile advertising. With Verizion estimating that 80% of media consumption will be via mobile devices in the near future, Yahoo’s mobile advertising platform could provide them with quite a head start over competing mobile service companies. An acquisition of Yahoo would also mean Verizon would take over another one of the company’s assets, Gemini, which mixes native ads with search for great results. The money is certainly there for mobile ads, and Verizon certainly has the money needed to acquire Yahoo. It will be interesting to follow this story as it unfolds.
Yahoo stock is down 3.97% or $1.11 following the news, hitting $26.86 per share. About 19.84 million shares traded hands or 9.73% up from the average. YHOO has declined 28.97% since July 2, 2015 and is downtrending. It has underperformed the S&P500 by 19.50%.
From a total of 27 analysts covering Yahoo! Inc. (NASDAQ:YHOO) stock, 19 rate it a “Buy”, 1 a “Sell”, and 7 a “Hold”. This means that 70% of the ratings are positive. The highest target price is $62 while the lowest target price is $31. The mean of all analyst targets is $40.81 which is 51.94% above today’s ($26.86) stock price. Yahoo! Inc. was the topic of 70 analyst reports since July 22, 2015 according to the firm StockzIntelligence Inc. Citigroup upgraded shares on February 4 to a “Buy” rating. Jefferies maintained shares with a”Buy” rating and a $49 target share price in their report from an October 21. Susquehanna maintained YHOO stock in a recent report from February 3 with a “Positive” rating. Morgan Stanley maintained the rating on October 21. Morgan Stanley has a “Overweight” rating and a $49 price target on shares. Finally, RBC Capital Markets maintained the stock with a “Sector Perform” rating in a report they issued on a February 3.
The institutional sentiment decreased to 0.8 in Q2 2015. It’s down 0.23, from 1.03 in 2015Q2. The ratio dropped, as 113 funds sold all their Yahoo! Inc. shares they owned while 235 reduced their positions. 60 funds bought stakes while 220 increased their total positions. Institutions now own 619.16 million shares which is 2.60% less than the previous share count of 635.68 million in 2015Q2.
Stonehill Capital Management Llc holds 60.89% of its total portfolio in Yahoo! Inc., equating to 5.71 million shares. Zenit Asset Management Ab owns 4.42 million shares representing 22.25% of their total US portfolio. Moreover, Indaba Capital Management L.P. has 21.81% of their total portfolio invested in the company, equating to 2.31 million shares. The United Kingdom-based Davide Leone & Partners Investment Co Llp has a total of 17.99% of their portfolio invested in the stock. Owl Creek Asset Management L.P., a New York-based fund reported 9.97 million shares owned.
Yahoo! Inc. is a technology company