Yahoo! (YHOO) spinning off BABA? Too late to get in on this? Depending on which way you want to go. (January 27, 2015)
I want to talk about Yahoo ( NASDAQ:YHOO ). After hours Yahoo ( NASDAQ:YHOO ) announced earnings that actually pleased everybody, right? Not really. The reason the stock’s up so much, and it is up a lot, is because they’re spinning off their stake in Alibaba ( NYSE:BABA ) in a tax free way, which is something that the big share holders have wanted and so they did it. The new company is called SpinCo and everybody’s is happy, happy, joy, joy.
The stock is up a lot but here’s the thing, other than that there really wasn’t much to brag about other than the fact that they’re spinning off their shares off of Alibaba ( NYSE:BABA ). In other words, at least from what I see, and from what I see from other people that are smarter than me, who actually look at fundamentals, they’re talking about there just wasn’t a lot to go on.
So here’s the deal, Yahoo ( NASDAQ:YHOO ) is spinning off Alibaba ( NYSE:BABA ), what’s that going to leave for the company? Not a whole lot, not a big reason to buy the stock up here. The stock is up 7.5 percent after hours. Don’t you think then that the spin-off has already been factored in to the price of the stock as you’re looking at it here? So what’s left? My bet is what’s left is about 50-$52.00 resistance.
My suggestion is this, if you’re long the stock and you think that I’m full of it then go ahead and hang on to the stock but use a stop loss, keep a stop maybe right under $50.00 or so on at least some of your position. The stock has been trending higher there’s no denying that; it has pulled back and so golly gee maybe it’s ready for the next move higher.
You Yahooians are going to be able to look at a 60.00, $70.00 stock and just hang on. If that’s your deal fine, but I would at least suggest keeping a stop on this. I see this as probably a gap and crap tomorrow or at least a gap and “cr” without the “ap” because the stock is going to be hitting right up against resistance.
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