Yahoo (YHOO), once a leading internet search engine, has lost a lot of luster to competitor Google (GOOG).Another competitor, Microsoft (MSFT), considered buying YHOO for $44.6 billion (approximately $31 a share) back in 2008, but founder Jerry Yang fought off a hostile takeover bid. Since then, the stock has spiraled downward, currently selling for a market cap of $21.96 billion.
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As shown from the chart, the stock has been hovering in a trading range of $14 to $17 for the last two years.Volume has stayed about the same over the two years.But is YHOO undervalued?
Microsoft wouldn’t have proposed a buyout twice if it didn’t see potential for YHOO, which remains second to GOOG in the advertising and search space, but is near #1 in unique online visitors.The company is more than just a search site, providing everything from news, sports, finance,
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