Daniel Loeb sells 40 million shares of Yahoo
The hedge fund activist has done very, very well out of his investment.
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. Loeb now owns 20,600,000 shares of Yahoo, keeping him as the top shareholder.
"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' trade information, since Loeb's initial buy, the fund cashed out at an impressive 129% gain.
Yahoo, the multinational Internet corporation, 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. . . . 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.
- 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.
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