The reason for YHOO to have 4:1 split is that its price will be
compatible with its peers, such as XCIT, LCOS. From its historical
split data, it seems to be not what they aimed at. They like the
price around $90's after split to keep away from its peers. Well,
I still think the price around $50's will put YHOO in line with its
peers and reduce volatility due to its lower unit price. PE will not
get impacted, but earning per share will be reduced, that is probably
the reason why they don't like lower price per share.
From its daily trading dollar amount, YHOO has been often in the
top three list, that may qualify it as a blue chip in the high tech
group. After 4:1 split, YHOO may also take a lead in the daily
trading volume.
It's impossible that YHOO won't split at the current level of unit
price. Everybody knows that and is waiting for YHOO's official
announcement. Of course, it'll split but may follow its traditional
pattern - take action after quarter report so it won't affect earning
per share record estimated by analysts.
With internet-related revenue to increase from $21b at present to
$200b in year 2000, YHOO will take a lion share of such increasd
revenue. I think analysts' 60+% next year's annual increase tends to
be conservative for the entire pie increasing up to 10 folds in two
years.
I still like YHOO's net profit margin, standing around 32%, that is
totally amazing because other internet companies are still in the
deep red.
Phil |
