ThePanelist.com - Ongoing Campaign to Invigorate Yahoo (YHOO) and an Options Strategy

Ongoing Campaign to Invigorate Yahoo (YHOO) and an Options Strategy

Neuberts Trades

Written by David Neubert

Monday, 22 January 2007

Yahoo Logo

As I first mentioned on my personal blog Eric Jackson's Campaign to create shareholder value at Yahoo (YHOO) continues. He is still small relative to the total size of Yahoo but I hope he will continue to gather momentum. Mr. Jackson is using every tool in the Web 2.0 arsenal; he's created a Wiki for the campaign, flickr group, a YouTube video channel and a of course his blog.

Let me say that I am a Yahoo fan. For years MyYahoo.com has been my browser startup page; I pay to use Yahoo enhanced email; I have over 2000 photos on flickr; I find Yahoo finance to be almost as good as Bloomberg but without the $1800 a month pricetag; I have even been using Yahoo's search recently and find it so greatly improved that I don't need Google as much.

In expectation that this campaign might gather more momentum and seeing that it is getting more press coverage, I recently added to my Yahoo (YHOO) position through a buy/write. On Jan 17th I bought Yahoo shares at $28.97 and sold Jan 2008 35 strike calls for $1.95. I have a net cost at expiration of $27.02 and will not have any upside beyond $35.00. (As of today Jan 22, Yahoo has fallen to $27.50 and the options to $1.50. This same buy/write could be had today for a much better net price of $26.00.)

I did a technocrati search for my blog and found coverage on the Plan "B" campaign from Publicidad y marketing en la red, a Spanish language blog. My first appearance in Spanish.

Here are the stats on Eric Jackson's Plan "B" for Yahoo taken from his Breakout Performance Blog.

Yahoo! "Plan B" Group Stats: As of 1/20/07

"Plan B" Advocacy Launched: 1/7/07
Current YHOO Shares Owned: 90K
Current YHOO Shares' Value: $2.4MM
YHOO's TSR since Launch: -0.36%
GOOG's TSR since Launch: 0.53%
NASDAQ's TSR since Launch: 0.70%
Relative Shareholder Value Created to GOOG: ($21,706)

Disclosures and Confessions: I own Yahoo and plan to pledge my shares to the campaign. However, if the shares rise above $35 I'm likely to start selling. I'm short Jan 2008 35 strike calls against half my position of YHOO and am also short Jan 2008 30 strike puts.

I like Yahoo!. For years MyYahoo.com has been my browser startup page; I pay to use Yahoo enhanced email; I have over 2000 photos on flickr; I find Yahoo finance to be almost as good as Bloomberg but without the $1800 a month price tag; I have even been using Yahoo's search recently and find it so greatly improved that I don't need Google as much.

Disclaimer: Nothing in this blog is meant to be specific financial advice or a recommendation to buy or sell. I do not give investment advice. Do your own research. Do not rely on anything in this weblog to make investment decisions. I do not log all my trades here. I only describe or mention those that I think might be interesting. Consult an investment professional familiar with your specific financial situation before buying or selling any security.