For those of you hoping that Yahoo! and Microsoft will soon reach some kind of agreement, you can see from the chart above Quarles doesn't expect a deal anytime soon.
“You might see something in 2009," she says, "but I’m putting to bed the idea that we’ll see a deal with Microsoft anytime this year.”
"We downgraded Yahoo! a couple weeks ago,” she reminds the traders. Quarles dropped Yahoo! to "underweight" from "market weight" and cut the stock price target to $18 from $28.
In a note to clients Quarles said it could be difficult for Yahoo's stock to appreciate until there is major action as the company relates to organizational hurdles, product improvements and the reacceleration of organic revenue.
On fundamental basis, the outlook remains cloudy at best and potentially could worsen. "They’ve lost about 140 executives over the last 6 to 8 months. There has been a stream of executives exiting."
In other words, "is it riskier to stay at Yahoo! or go to a start up?” she says “and a lot of executives are choosing the latter.”
And that leads to our Charles Schwab Question of the Day!
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Trader disclosure: On July 31, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (EMC), (DIS), (ATVID), (MSFT); Adami Owns (C), (AGU), (BTU), (GS), (INTC), (MSFT), (NUE); Finerman Owns (GS); Finerman's Firm Owns (MSFT), (SUN), (TSO), (TYC), (VLO), (RIG), (UFS); Finerman's Firm And Finerman Own (C) Leaps; Finerman's Firm Is Short (XLF), (BBT), (IYR), (IJR), (MDY), (SPY), (IWM), (COF); Seymour Owns (AAPL), (CSCO), (F), (MER), (MSFT), (INTC); Seygem Asset Management Owns (VIP), Gazprom; Seygem Asset Management Is Short (RSX)
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