Yahoo Are You Kidding Me

I usually get very excited when I see a stock that is incorrectly priced, this usually indicates a good buying opportunity.  Every once in a while a stock comes along that is incorrectly priced the wrong way- namely massively overpriced. So overpriced are these stocks that I am at a complete loss to explain why any investor would buy them. Yahoo in its current state falls firmly in this bucket. In reviewing some of the company’s key stats I was shocked to see the poor condition of the business.  Lets look at a few key statistics:

I am a firm believer that a brand has intrinsic value that cannot be accounted for on a balance sheet, but are you kidding me with a P/E  of 4639.88? Yahoo is a search and advertising company in a field they created but haven’t dominated in for years.  Even if they were financially healthy their sustainable competitive advantage left a long time ago.

Then you have the active selling that several member of Yahoo have been doing with their stock over the last month. Ichan sold off $189M of his stock just this last week.

Unless you are a firm believer that Microsoft or someone else will be coming riding in to buy the brand, or that they have some secret product or deal that is in the works (so pretty much unless you want to get away from investing and into speculating) I think you would be simply insane to want to invest your money here.