Author Archives: Scalper1

Yahoo Stock Keeps Climbing On Sale Talk, Alibaba Buyback Chatter

Yahoo ( YHOO ) stock climbed for the fifth straight trading day on Tuesday amid chatter that China e-commerce giant Alibaba Group ( BABA ) might buy back the valuable stake Yahoo now holds in it, according to a media report. Rumors that Alibaba might buy back its stake from Yahoo have emerged before, although some observers say such a transaction is unlikely because of high tax implications for Alibaba. Yahoo has said it is approaching buyers potentially interested in all or part of the company — and Alibaba’s recent financial moves have some investors wondering if the Chinese conglomerate is ready to make a play for Yahoo , according to a report in Variety. Alibaba senior executives Jack Ma and Joe Tsai said on Monday that they will spend a combined $500 million to buy company stock. It will be part of a $4 billion stock-buyback plan that Alibaba announced in August. Comcast ( CMCSA ), Verizon ( VZ ) and AT&T ( T ) “remain the leading candidates to acquire Yahoo,” said Mizuho analyst Neil Doshi in an industry note this week, adding that those companies could offer a higher price than private equity groups, wield huge subscriber bases across Internet and TV, and operate leading mobile services. Time ( TIME ) has also been mentioned as a possible Yahoo acquirer. Yahoo stock was up just over 3% ahead of the closing bell in the  stock market today , near 33, while Alibaba was up nearly 3%. Yahoo has gained 25% since early February, but is down 26% from where it was trading this time last year. Yahoo shares also climbed more than 3% on Monday. Yahoo’s Asian assets — comprised of its Alibaba holdings and a 35.5% stake in Yahoo Japan — represent the vast majority of Yahoo’s $3.8 billion market value. Yahoo owns a 15% stake in Alibaba, or about 384 million shares. Asked about Alibaba’s interest in buying back its shares from Yahoo, Alibaba Executive Vice Chairman Joe Tsai said during an October call with analysts that Alibaba would buy back its shares “if it is very significantly accretive to our shareholders and that’s the principal we operate on.” Scott Rostan, founder and CEO of Training the Street, a group teaching corporate valuation and merger and acquisition skills, told IBD this week that Alibaba’s buyback of its shares from Yahoo “is definitely possible.” He added: “They could buy back 15% of their own stock and then (effectively) own Yahoo, which would be a very ironic twist.” In 2012, Alibaba bought about half of Yahoo’s then-40% stake in a deal valued at about $7.6 billion with the backing of China’s sovereign-wealth fund, China Investment Corp., and a clutch of private-equity firms. Because Alibaba’s purchase of the remainder could result in a huge tax bill on Yahoo’s gains from the Alibaba, “I think they have no interest,” Shanghai-based 86Research analyst Sean Zhang told the Wall Street Journal in December. “They will continue to focus on growth, focus on building a more competitive company,” Zhang said. Alibaba said that it had $18.2 billion in cash, cash equivalents and short-term investments as of December 2015. Yahoo’s directors are close to offering at least two board seats to activist hedge fund Starboard Value in order to avert a proxy fight, according to a report on Friday in the New York Post. Starboard founder Jeff Smith is looking to oust Yahoo CEO Marissa Mayer and force a sale of the company’s core Internet business. Analysts say Yahoo is likely to lose advertising dollars to Facebook ( FB ), Alphabet ( GOOGL )-owned Google and high-profile startups like Snapchat and Pinterest. On Monday, Yahoo also said that it may have to write-down the goodwill value of Tumblr , more than two years after the Web pioneer spent $1.1 billion to buy the microblogging site. Yahoo said earlier that it took a $230 million impairment charge related to Tumblr and was considering strategic alternatives for its core Internet business.

Square Ups Ante In Payments Battle Against PayPal

Hot off the heals of its November initial public offering, Square ( SQ ) has added a feature that will up the stakes in its battle against payments rival  PayPal ( PYPL ): Square customers can now store cash in the Square Cash service. Square Cash is a peer-to-peer payments service that lets customers send money to anyone in the U.S. with an email address. It’s designed for things such as paying a friend back for a cab ride, or sharing a restaurant bill. The new feature Square announced  Monday is called Cash Drawer, and allows anyone who has the Square Cash app — sending or receiving money doesn’t require the app, just email — to store money and use it to pay people back at a later date. Square stock was up more than 3%, near 11, in afternoon trading on the stock market today . The San Francisco-based firm had a strong first day after making its IPO, with its stock rising 45% that day and touching its still-record high of 14.78, after prices shares at 9. But the stock has mostly fallen since as many bigger companies compete in payments. The new feature makes Square Cash look a lot more like rival PayPal and its peer-to-peer payments subsidiary Venmo, which is popular among millennials . Both PayPal and Venmo already have the capability that Square added Monday. Square Cash is outside the company’s core business, which is a set of digital cash registers and transaction processing, marketing and financial services, which it sells mostly to small businesses. Square CEO Jack Dorsey is also the top boss at microblog  Twitter ( TWTR ). Visa ( V ) has a sizeable investment in Square.

Apple Stock Retakes Critical Level As Market Surges

Loading the player… Apple ( AAPL ) made a critical move in the stock market today as the major indexes notched solid gains. The consumer tech giant is set to unveil new products at its March 21 spring media event. Some analysts speculate that Apple will roll out a small-screen iPhone and a smaller-screen iPad Pro. Shares jumped 4% to 100.53 in slightly below-average turnover, retaking the key 50-day moving average. Apple hasn’t traded above that level in nearly three months. The move also puts Apple back above the 100 price level. It’s a good sign for Apple to be coming off of its recent lows, but it’s also good to remember that its 50-day line is sloping downward as Apple’s overall performance over the last several months has trended lower. The stock is currently trading about 25% below its all-time high, reached last April. Apple is currently battling a federal order to assist the FBI in unlocking an encrypted iPhone connected to the terrorist attack in San Bernardino, Calif. Meanwhile, Facebook ( FB ) is continuing higher as it bounces back from a breach of its 50-day line about a month ago. The stock is now trading 6% below its high. Google owner Alphabet ( GOOGL ) was able to retake its 50-day line, rising 3.5% in above-average volume Tuesday. Alphabet is about 8% below its high. Microsoft ( MSFT ) tried to retake its 50-day line and closed the session right at that level. Other recent attempts to retake that level met resistance. Microsoft is 7% below its peak. Amazon ( AMZN ) is 16% below its high. The e-commerce giant was able to retake its 200-day line last week. Image provided by Shutterstock .