They Are Still A Bunch Of Yahoo's

News came out last night that Yahoo YHOO had fired CEO Carol Bartz, and the Wall Street Journal reported that the company could be up for sale, to the highest bidder. You know what? It doesn't matter. The board, and the company, are still, well a bunch of Yahoo's. Bartz was fired over the phone, and while she was not especially well liked, either by Wall Street, or internally, that is still the wrong thing to do. You fire someone face to face, that is how you operate in business. Being a sneak and firing someone over the phone is embarrassing to both the person being let go, and the company. It shows a lack of class, and class still matters in business, whether people want to believe it or not. What is even funnier (and perhaps pathetic) is that Bartz sent an email to her employees using Apple's AAPL iPad. Here is the email which has been passed around like a hot potato. To all, I am very sad to tell you that I've just been fired over the phone by Yahoo's Chairman of the Board. It has been my pleasure to work with all of you and I wish you only the best going forward. Carol Sent from my iPad Obviously Yahoo is not in the hardware game, but it just goes to show you that Apple always does things correctly, while Yahoo can not even fire someone correctly. Her replacement, Tim Morse, is not especially well liked, and some have even called for him to be fired along with Bartz. Trip Chowdhry, of Global Equities Research wrote in a research note, “Both Carol and Tim [Morse] should have been fired together as they both have damaged YHOO's business and repairing it will be extremely difficult. We don't have high opinions on the CFO...he just kept cutting costs which is the…easiest thing to do. Both the CEO and CFO are completely clueless of the velocity of innovation that is needed to succeed in the Internet space.” When the Yahoo employee who told the Journal that Bartz was fired, the employee also said that the company would be "open to selling itself to the right bidder." Yahoo had its chance to sell itself years ago, when CEO Jerry Yang (who is a co-founder of the company and still a board member with a lot of sway) mangled the deal. Microsoft MSFT was willing to pay north of $30 ($33) for the company. Even with today's ~6% pop, shares are below $14. Shareholders should sue for incompetence, but that just seems to be the Yahoo way. The company has a ton of viable properties, with its Asian properties getting obviously the most attention. Some have said that the Asian assets, which includes, 40% of Alibaba Group, Yahoo! Japan, and others are worth $8-$10 per share. The company managed to screw that up, as it almost lost the AliPay assets when Alibaba Group CEO Jack Ma nearly pulled the wool out from under Yahoo's eyes. A settlement was later negotiated, but the black mark still remains fresh on the company. Names like AT&T T, Verizon VZ, News Corp NWSA have been mentioned as a buyer of Yahoo, but some have speculated that Alibaba could be the buyer of Yahoo. The company still has plenty of North America properties that incredibly well liked, and the tops in their sectors. Yahoo! Sports, Yahoo! Finance, Yahoo! Movies, etc. are still widely used. It does not matter though when you have a board of directors that butchers every move, and replaces its CEO every few years like the President of the United States. Ultimately, it remains to be seen whether Yahoo's board can get its act together, and sell the company to the highest bidder. For now, still a bunch of yahoo's over there. ITEMS:

Bullish:
Traders who believe that Yahoo's board will sell the company and not butcher it this time might want to consider the following trades:

• Yahoo could probably fetch anywhere between $18-$22 per share, based on assets. That is a significant premium to today's share price. Consider going long Yahoo at these levels.

• Traders can also short the potential acquirers, such as Microsoft, Verizon, AT&T or Alibaba. This is a pairs trade, and the acquirer generally gets shorted in this trade.

Bearish:
Traders who believe that Yahoo's board will mess up this chance to get out may consider alternate positions:

• Fool me once, shame on you. Foll me twice, shame on me. Yahoo's board has proven to be extremely incompetent before. Why should things change now? Take today's ~6% pop, and short Yahoo.
  
  

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