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Technology Stocks : Altaba Inc. (formerly Yahoo)
AABA 19.630.0%Nov 6 4:00 PM EST
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To: Jumper who wrote (1681)9/30/1997 11:59:00 PM
From: fut_trade   of 27307
 
Shorting 101 -- Beware of the "!" IPO.

There seems to be some confusion regarding the value of YHOO. I will take it upon myself to provide a method for evaluating the value of YHOO.

Is $50 a good value for YHOO -- well, it all depends on what one sees as value. For starters, Shorty might base fundamentals on the number of outstanding shares. Is this right? No, no, no!!!

Can Chief Yahoo Yang! and Chief Yahoo Filo! sell all of their shares tomorrow? Can Shorty sell all of Chief Yahoo Yang!'s or Chief Yahoo Filo!'s shares tomorrow? No, no, no!!! The total number of outstanding shares has little meaning for all intensive purposes. Thus only the float is useful here.

Now -- some number crunching.

The number of outstanding shares is 42.9 M.
The float is 6.45 M.
This gives a "!" factor of (6.45 M)/(42.9 M) or 0.15.
Given the P/S of 58, we obtain the P/S! as 0.15*58 = 8.7.

Thus, we have a more reasonable number. The method is readily extended to P/E. For '98 we have a projected EPS of 0.39. The '98 P/E! is then obtained as 0.15*$50/0.39 = 19.

This is a very reasonable number.

Of course, these numbers need to be adjusted as Chief Yahoo Yang! and Chief Yahoo Filo! gradually sell a fraction of their shares over the next 10 to 20 years.

I hope this clears up all the misconceptions regarding the value of YHOO.

********************
* P/S! = 8.7
* '98 P/E! = 19
********************

Peter
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