Yahoo Shares Stagnate At Best
Yahoo share values leave investors unmoved – high expenses take away all the profit.
According to The New York Times, Yahoo’s overall income increased by 15% in the second quarter, but this figure was rendered insignificant due to high expenses. The outlook in this area is grim for the future; leaders of the company predict that costs won’t decrease until the end of the year. As a result, Yahoo shares dropped by approximately one percent. Right now, investors are looking at the company’s other dealings instead of advertising, namely, Yahoo’s 15% ownership in AliBaba.
New online gambling business opportunities pop up every time and gaming organizations try to use them to their advantage. Yahoo did something similar when it bought a 15% stake in AliBaba in order to, as The New York Times reports, “spin off the holdings, worth more than $30 billion, into a separate company called Aabaco Holdings in the fourth quarter.”
Yahoo shares dropped and AliBaba may not be the answer
As The New York Times states, the problem with Yahoo’s plan regarding the holding spinoff is that they hope to duck the capital-gain tax bill. The Internal Revenue Service, however, will probably not accept Yahoo’s proposal for the spinoff to be tax-free. Further information at this time is unavailable on the AliBaba-plan. The current revenue for the second quarter of the company is USD 1.24 billion, but after subtracting the expenses, all the profit is gone. One year ago, the company recorded a 26 cents per share profit. Now, it is a 2 cents per share loss.
Marissa Mayer, Yahoo’s CEO said the followings during a conference call with shareholders, “We are investing heavily to grow market share through traffic acquisition.” This, however, might not mean a thing. Robert Pack, an analyst of SunTrust Robinson Humphrey told The New York Times: “The core fundamentals are not executing according to plan,And the profitability they are guiding is going to get worse.” Maybe Yahoo should start playing with gambling apps that win money?