Yahoo Board Approves a $1.1B Pricetag For Tumblr 142
TechCrunch reports that Yahoo's string of acquisitions may soon include Tumblr: "The Wall Street Journal is now reporting via Twitter that the rumored $1.1 billion cash acquisition deal for social blogging site Tumblr has been approved by Yahoo’s board of directors. The Tumblr acquisition was rumored last week, with a price tag reportedly north of $1 billion, which appears to be accurate if the WSJ’s sources are correct." The article notes, too, that "Yahoo had only $1.2 billion cash on hand as of its most recent quarterly earnings, which makes an all-cash offer for Tumblr a lot more of a stretch than it would be for someone like Apple, or even Facebook, which acquired Instagram for $1 billion in a mix of both cash and stock."
Re:Strange (Score:1, Informative)
I don't think you know what you're talking about [addictinginfo.org]
Re:Let's see (Score:5, Informative)
So, to reorder your numbers a bit,
100m in projected revenue / 40m in cost of goods this year = 60m in profits. (40m is from wiki's original source, numbers are projected, so....)
1.1b market cap / 60m profit = Price/Earnings ratio of 18.
P/E ratio for the S&P is 14.
It looks like it has high growth, that would push the numbers up. Huge risk / numbers are projections / I am doing the numbers on the fly without all of the accoutning number - would push the numbers down.
Re:"Social" is a lose (Score:2, Informative)
Also, you need replacements to sustain the user base. For a site that started for college-aged users, the demographics of facebook are aging. Teens/students don't want to be on FaceBook because their parents (and grandparents) are on FaceBook.
Re:Strange (Score:5, Informative)
Yahoo is also sitting in a nice pile of cash 4 bil i think.
RTFS. Yahoo has $1.2B on hand and are commiting 92% of that on this purchase.
Re:Strange (Score:3, Informative)
While we like to mock CEOs, at the end of the day they got to where they are by being good at what they do. The problem is what WE think they should be doing and what actually pays off is pretty out of sync. Right now the job market for CEOs rewards short term profits at the expense of long term viability. Investment in the future is generally punished. Granted the public and the tech community might point out that such behavior hurts the company, the people who actually influence the person's pay and future employment options do not, nor do they care. Long term stability and profits just are not considered priorities.