Prosperity Through Investing: Google, Yahoo, Carl Icahn, Cablevision
Read more articles on Internet and Investing.May 16, 2008
Posted by neillevine
May 16, 2008
Posted by neillevine
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The Dow still remains below thirteen thousand. While somewhat above the recent bottom, this is not a strong statement of faith in the three hundred dollar individual tax rebate currently being handed out, what the three remaining Presidential candidates are doing and all the other distractions taking place in Washington.
A good rally would be an economic vote of confidence, a financial boost in the arm, a monetary heads up, but that may be too hard for Capitol Hill insiders to understand.
On the other hand, if you are interested in what it takes to make money on the Street there are current stock stories that can be illuminating.
When the recent stock slide began, Google, GOOG, was around seven hundred fifty dollars. It slipped all the way down to the four hundred fifties on fears that its revenues from clicks was slipping based on reports published in the papers saying click rates were slowing. The company issued no earnings warning and, indeed, said it had refined its search algorithm to once again improve results. So when Google reported its financial numbers they were what was expected, allowing the stock to rally to its current value of around five hundred eighty dollars a share. Should the company earn the twenty something dollars a share for this year and twenty four dollars for next, it is possible to earn some money here.
Then there is the Yahoo story which has opened a new page. Instead of buying shares at market or even making a tender offer at a fixed price and obtaining a significant stake, Microsoft for some reason stepped away, not wanting to offer ever more money for the business assets it was after. So Carl Icahn, seeing an opportunity to make a relatively fast thirty percent, or more, return on his investment, has stepped in and is running a slate of candidates for the company board with the idea of putting it up for sale and getting a quick return on his investment. Since Yahoo is making money and is still growing with the internet, just not as fast as Google, and the market seems ready to rally in any case, this strategy appears to have low risk and the potential for a good return. This financial drama can last until July, depending on whatever dramatic twists and turns develop.
Finally, Cablevision, CVC, a company whose stockholders voted down a privatization offer is acquiring assets such as the Sundance Channel and Newsday, the Long Island newspaper, that should enhance its future earnings and, therefore, its stock price, which is still substantially below the privatization offer.
Such are the trials and tribulations involved in watching stocks with the intent to make money.
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