iBooyah.com Investment Matters

Ebay posted a great quarter, but the Skype charges killed the rally. Instead of reporting a nice profit, the quarter ended with a 936 M in the red.  Although this looks bad on the surface, we see this as an opportunity to buy. Their auction business increased 30%, that’s quite respectable. The company’s fundamental remains sound with plenty of cash for future investments. However, Ebay needs to do something with Skype. Either get rid of it totally or spin it off.  It is evidently clear that Skype was a billion dollar mistake for Ebay.

Yahoo! did okay, beating estimate by 3 cents per share. This is the first time Yahoo beat estimates in awhile so investors are encouraged. The stock rallied nicely yesterday and closed above $29 today.  Although Yahoo (YHOO) surprised the street, skeptics remain.  Reading through analysts' comments, Yahoo did not gain much respect. 

The majority of the comments were concentrated on the negatives (not good enough, unsustainable growth and etc).  I guess we can’t blame them since these analysts were burned by Yahoo before. It will take a few great quarters to win back Wall St. Contrary to most analysts’ opinions; we believed Yahoo is on its way back.  In listening to the conference call, Yang did not say much to get  people excited, but our take is Yang is the type of CEO that rather deliver instead of just talking about delivering. We believed the company is setting low expectations on purpose. The 4^th quarter report should be interesting. Our price target for YHOO by end of 2007 is $35 per share.