Kaminsky's Call: Yahoo's $3 Billion Buyback More Smoke and Mirrors
Morgan Stanley, Vice Chairman
Is Carol Bartz the world's most desperate woman?
Yahoo! and its CEO (that would be Bartz) went for the jugular last night, and announced a $3 billion buyback.
While the move could lend short-term support to the stock, companies that initiate buybacks at 52-week lows usually have as much success as the Greeks do in the Winter Olympics.
Today’s "Call-to-Action" is simple: Don't be fooled by Yahoo's attempts to prop up its stock. Just because it's at a one-year low doesn't mean it can't go lower.
Yesterday, I searched the NYSE’s 52-week low list and found a long-term name with promise in Exxon Mobil . It was a casualty of quarter-end selling. Yahoo is not.
When Bartz was hired in January 2009, there was fanfare and promise that she would march the company back to the promised land. Instead, the stock has severely lagged the broader tech index. Microsoft's overture and subsequent rejection remains a searing memory for shareholders.
To think that the pre-split all-time high was $500.13 is just mind-boggling.
The most attention Ms. Bartz has been able to garner for her company is when she uses profanity in public forums, an event that is viewed by millions, ironically enough, on Google's YouTube.
Management can use all the smoke and mirrors it wants. The fact remains that Yahoo's stock price is just a temporary stop to some lower destination.
I shudder at the thought of what desperate move could be next.
- Yahoo Approves $3 Billion Stock Buyback Plan
- Yahoo Chief Defends Her Site, Strategy
- CNBC Video: Yahoo CEO F-Bomb Tech Event
"The Strategy Session," hosted by David Faber and Gary Kaminsky, airs weekdays at Noon ET on CNBC.
Correction: The headline of this post has been corrected. The post originally said that Yahoo's buyback was $3 million. The actual buyback was $3 billion.
Gary Kaminsky does not hold any equity positions.
The content of this blog is published in the United States of America and persons who access it agree to do so in accordance with applicable U.S. law.
All opinions expressed in this blog are solely the opinions of Gary Kaminsky and do not reflect the opinions of CNBC, NBC UNIVERSAL or their parent company or affiliates, and may have been previously disseminated on television, radio, internet or another medium. You should not treat any opinion expressed by Mr. Kaminsky as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Mr. Kaminsky’s opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Kaminsky, CNBC, its affiliates and/or subsidiaries are not under any obligation to update or correct any information provided on this website. Mr. Kaminsky’s statements and opinions are subject to change without notice. No part of Mr. Kaminsky’s compensation from CNBC is related to the specific opinions he expresses.
Past performance is not indicative of future results. Neither Mr. Kaminsky nor CNBC guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment discussed on this website or on the show. Strategies or investments discussed may fluctuate in price or value. Investors may get back less than invested. Investments or strategies mentioned on this website or on the show may not be suitable for you. This material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned on this website or on the show. Before acting on information on this website or on the show, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.