Yahoo (YHOO) released earnings at the higher end of the guidance range and watched the stock sell off. Chief Executive Officer Carol Bartz said 2009 was a transformative year. Transformative is not exactly a defined term in the investor lexicography. But Yahoo shareholders have had one.
Yahoo is approximately $22.2 Billion in market cap. They will win some and lose some in the advertising revenue wars. They currently have some $3.5 billion in cash and equivalents. This is 16% of current market capitalization. What to do, to increase shareholder wealth?
Yahoo should think about getting into the dividend game. You have a few black eye’s in the Internet space and the go go momentum investors are not impressed. If a dividend goes on the table and the market believes it’s credible it will change the valuation. Your shares may become a currency. Buy and hold investors will start to accumulate.
Carol Bartz a dividend would be transformative.