YHOO

O

oldnemesis

http://www.investors.com/news/technology/verizon-may-announce-yahoo-purchase-within-days/?yptr=yahoo

http://www.nytimes.com/2016/07/23/business/dealbook/yahoo-sale-verizon.html

https://www.zacks.com/stock/news/224687/is-yahoo-verizon-the-worst-merger-ever

http://stockcharts.com/h-sc/ui?s=yhoo

So Verizon is going to buy YHOO...or so people think. If the New York Times says it, it must be true.

I am looking at some trades to submit on Monday open with that assumption in mind.

Looking at the recent chart for YHOO I want a trade that is breakeven at around $30 in case it turns out to be hogwash.

Trade#1:
Jan '18 30/25 bull put spread for a net credit of $80
OptionsXpress says I can get $78 for this spread but if I can get 78 I can get 80:

Price.......... Profit / Loss.......... ROM %
18.75............. (420.00)............. -84.00%
24.60............. (420.00)............. -84.00%
25.00............. (420.00)............. -84.00%
29.20.................. 0.00................. 0.00%
30.00................ 80.00................ 16.00%
30.76................ 80.00................ 16.00%
36.91................ 80.00................ 16.00%
43.07................ 80.00................ 16.00%
49.23................ 80.00................ 16.00%

I don't worry about the long time frame because the entire hypothesis is that these options will disappear long before Jan '18. I figure about 6 months.

Some people don't like credit spreads because of the unfavorable risk/reward.

Trade#2
Jan'18 25/30 bull call spread for a net debit of $300

Price........... Profit / Loss........ ROI %
18.75.............. (300.00).......... -100.00%
24.60.............. (300.00).......... -100.00%
25.00.............. (300.00).......... -100.00%
28.00................... 0.00................ 0.00%
30.00................ 200.00.............. 66.67%
30.76................ 200.00.............. 66.67%
36.91................ 200.00.............. 66.67%
43.07................ 200.00.............. 66.67%
49.23................ 200.00.............. 66.67%

compare to buying a Sept 39 call for $182

Price............... Profit / Loss.......... ROI %
29.25................. (182.00).......... -100.00%
33.08................. (182.00).......... -100.00%
37.12................. (182.00).......... -100.00%
39.00................. (182.00).......... -100.00%
40.82...................... 0.00................ 0.00%
41.15.................... 33.40.............. 18.35%
45.19.................. 437.00............. 240.11%
49.23.................. 840.50............. 461.81%

Many possibilities.
 
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trilogic said:
hi what about probabilities of each outcome happening, at least normally distributed or what the market anticipates ?
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Well, obviously distribution probabilities are irrelevant when you are dealing with M&A except perhaps to evaluate the bid.

I'm waiting for further confirmation of the purchase and information about what exactly is being bought and what is going to happen to the residual.

As info is forthcoming I will post additional trade ideas.

http://finance.yahoo.com/video/yahoo-assets-could-fit-verizon-000843652.html

I don't know how the purchase of AOL by Verizon is going, but I certainly haven't seen anything that makes me think it was a particularly good idea. So this is some more of the same.

Frankly if I were Verizon and I wanted this business (whatever that is) I would simply use my clout to build a completely new organization and take their business and let the two old organizations whither on the dead vine.

But since they already bought AOL it's too late for that. (They COULD just throw AOL away. i.e. Fire everybody, delete assets and start over)

I think with AOL Verizon got a lot of useless trash along with the buy and they will get similar by buying YHOO.
 
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Remember when Microsoft offered around $45 billon for Yahoo...and Mr. Yang turned it down...now they are probably going to accept a buyout for $5 billion hahahaha.....just goes to show you how much these companies are really worth....I bet if you wait another couple of years you can pick up Yahoo for something under a billion.....just shows how desperate Microsoft was back in the day to acquire Yahoo at a bubble price....oh wait a second Microsoft is still desperate today in 2016 paying over $20 billion for linked in, which is another bubble company that could have been bought for less than a billion as well in due time....oh well....keep paying ludicrous prices for the dot com and social media companies and just write it off as worthless in the years to come
 
oldnemesis said:
Well, obviously distribution probabilities are irrelevant when you are dealing with M&A except perhaps to evaluate the bid.

I'm waiting for further confirmation of the purchase and information about what exactly is being bought and what is going to happen to the residual.

As info is forthcoming I will post additional trade ideas.

http://finance.yahoo.com/video/yahoo-assets-could-fit-verizon-000843652.html

I don't know how the purchase of AOL by Verizon is going, but I certainly haven't seen anything that makes me think it was a particularly good idea. So this is some more of the same.

Frankly if I were Verizon and I wanted this business (whatever that is) I would simply use my clout to build a completely new organization and take their business and let the two old organizations whither on the dead vine.

But since they already bought AOL it's too late for that. (They COULD just throw AOL away. i.e. Fire everybody, delete assets and start over)

I think with AOL Verizon got a lot of useless trash along with the buy and they will get similar by buying YHOO.
More...

I have followed since days before MSFT's failed bid in 08' as it was the best entertainment around. Do know that the core makes up only 5-10% of its current share price as it's stake in Yahoo Japan and especially it's 15% stake in Alibaba is worth most of it's value. If they avoid the 10-15B tax on BABA or BABA goes back to $120 it'll dwarf this $5B sale. It's really an ETF. As for AOL, I looked at their financials, last year, and their advertising platform is rapidly growing and profitable. Add in Yahoo's size, slash employees, and it MAY be a cash cow for Verizon but I do agree it's two crap companies.
 
vanzandt said:
Time to short Verizon.
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Under statement of the century. This Verizon - Yahoo deal makes NO SENSE.
Verizon sucks enough at customer service...how in the world are they now going to manage both web content and search ?
They are totally "out of their league". What a dumb deal.
This further promotes the idea of "back to the web bubble of 2000".
 
Verizon is very good for wireless customers. They're expensive but their network is solid. Will be the first to deploy 5G. On a global scale, AT&T has them beat. Why? GSM! AT&T and T-Mobile fare much better on the enterprise level than Verizon but Verizon now has a much larger audience. Looks like ad revenue is where they will make their money.
 
"Looks like ad revenue is where they will make their money."

Ad revenue is no longer a business model. If you want to play ad revenue, (which I never would),... play Facebook.

And wireless.... its a commodity now. Its like Duke Power for gosh sake. Its for grandma.

I can promise you, ....VZ is gonna tank on this one. Its comedy. If Yahoo hasn't worked in the last 23 years, why in the f*ck would anyone think they would work now. Its good money chasing bad. OMG!!!! I don't know about all these Ivy Leaguers on Wall Street. No flippin common sense.
 
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