Should you add Yahoo stock to your portfolio? With millions of users each month, the popular web services provider Yahoo is one of the oldest names on the internet.
In their heyday, the company raised a mind-boggling $1 billion dollars during their IPO. Many who held Yahoo Stock became millionaires overnight. But what's happening now with Yahoo. Should you buy stock in Yahoo? Keep reading to find out.
What Is Yahoo Stock Price?
- At one point Yahoo stock price was in the $30's. However, as of 2017 Yahoo was delisted and no longer trades on the stock exchange. So there is no yahoo stock price now. Instead, they became a management investment company.
1. The Creation of Yahoo
For any of you old enough to remember the pains of dial-up internet, you probably remember the mind-boggling maze of the World Wide Web.
For those unfamiliar, I liken it to driving in rush hour traffic in India, no lanes, six lanes of traffic squeezed into three, some traffic lights, a road sign or two, just a complete free for all. (Side note: no offence to India, but I've been there, and I've lived and managed to survive the traffic). Needless to say, it's mind-boggling.
Now that you have that lovely picture in your mind imagine the internet in 1994. At this time, literally, thousands of websites were being created every day with barely any way to navigate them.
While seeking to make sense of this chaos, Filo and Yang decided to make their own database for the web.
With many late nights and I'm sure headaches, Jerry and David complied a list of their favorite websites for the Yahoo database. In the beginning, the list was manageable.
But it quickly morphed into a giant and became too large to navigate with ease. The list was divided into categories (think traffic lanes), which were soon split into subcategories (think collector lanes on highways).
Eventually the database grew and evolved into the context-based search engine it is today. You can search Epic Games stock as well as Yahoo stock.
2. The Meaning Behind Yahoo's Name
I bet you didn't know that Yahoo is a backronym for "Yet Another Hierarchical Officious Oracle." Neither did I. The brainchildren behind this rather odd and long name are David Filo and Jerry Yang.
In 1994, these two engineering Ph. D candidates at Stanford University decided their search engine needed a face lift. Their original name "David's and Jerry's Guide to the World Wide Web" was let's say least than inspiring.
Where did they turn? No other than the trusted dictionary and chose "yahoo" because it was a word that pretty much anyone could say and remember.
Fast-forward a few years, and the longer title, "Yet Another Hierarchical Officious Oracle," was decided. To be honest, it's quite clever.
For starters, it perfectly described Filo and Yang's search engine: "Hierarchical". In fact, it described the Yahoo database arrangement perfectly: in directory layers.
Secondly, "officious" as mainly it was office workers using the database. And finally, "oracle" was intended to mean "source of truth and wisdom."
You can look for the best real estate books or how to cook zucchini on Yahoo. You can even ask if there's Yahoo stock.
3. The Making of Success: Yahoos! Legendary Growth
Like many things in life, the Yahoo audience grew in most part by word of mouth. So much so in fact, that in just one year, the Stanford network became so clogged with Yahoo web search traffic that Filo and Yang had to move their Yahoo database to the offices of Netscape.
Luckily for David and Jerry, they realized an opportunity staring them in the face. With that, they incorporated Yahoo in March of 1995 and left school to work on Yahoo full time.
Just one month later, Yahoo received a $2 million initial investment from Sequoia Capital investors. After that, the money and success of Yahoo continued.
As an example, their IPO in April of 1996 equaled about $1 billion for the company. Yahoo stock was off the charts then.
4. Yahoo Interesting Facts
- On IPO day, April 12, 1996, Yahoo stock opened and shot up to $43 within an hour. In total, 8.5 million shares traded, which equaled $1 billion for the company.
- Yahoo! stocks highest closing was at $118.75 a share on January 3, 2000
- David Filo and Jerry Yang never went back to finish their Ph.D. studies. However, that didn't hamper their success; they're both ranked by Forbes as two of the 400 wealthiest men in America.
- Yahoo uses Bing technology for search and is now the #5 ranked URL in the U.S. in terms of web traffic.
- Verizon completed its acquisition of Yahoo in 2017, and Yahoo is no longer an independent company.
5. A Fall From Grace?
Monday, June 19, 2017, marked the official end of Yahoo! as a publicly-traded company. After paying $4.5 billion, Verizon ($VZ) is now the (proud?) owner of the once-popular website and most of its assets.
With the acquisition, Yahoo completed its journey from one of the biggest internet companies on the planet to just another media brand. Verizon bought Yahoo for the sole purpose of combining it with AOL, another ageing internet relic. Yahoo and AOL combined into a company called OATH.
Sadly, only a year and a half after it built Oath from the assets of the communications giants Yahoo and AOL, Verizon indicated they're virtually worthless.
Can I Buy Yahoo Stock?
- Because Yahoo is no longer an independent company, you are unable to buy Yahoo stock. But even if you could buy Yahoo stock, you probably wouldn't want to.
1. Yahoo Mobile Service
In an attempt to infuse life into Yahoo, Verizon is trying to get customers excited with a new "Yahoo Mobile" service. Its simplest form combines Verizon's 4G LTE network with Yahoo mail (for some reason). In a statement released, Verizon indicated that "Yahoo Mobile will bring together the capabilities of Verizon's 4G LTE network and Yahoo's trusted brand to create the best experience and connectivity for consumers."
I doubt Yahoo Mobile will do much to infuse life into Yahoo's diminished reputation. But Verizon seem excited about it, throwing the word "synergy" around. Their success waits to be seen.
2. Should You Buy Shares in Verizon?
Since you can't buy Yahoo stock, the next best thing would be to buy their owners, Verizon (NYSE: VZ). Or is it? When you crunch the numbers, Verizon delivered.
Over the past five years, they had total returns of over 50%, and they still trade at a rate of less than 12 times their forward earnings. But in this pandemic driven volatile market, is it still a good buy?
Bullish Bears is not here to give you investing advice, but Verizon (NYSE: VZ), the second-largest wireless carrier in the U.S.
For those conservative investors, Verizon is often considered a stable income investment. For starters, they've raised their dividend annually for 13 straight years.
Additionally, they pay a forward yield of 4.3% and last year only spent a meager 57% of their free cash flow on that payout. Let the numbers speak for themselves, do your due diligence before purchasing stock in any company.
Yahoo Stock Bottom Line
Yahoo stock is no longer available to trade. However, the stock market is full of other stocks to trade. As a result, you can trade a large amount of stocks that can help you grow your brokerage account.