Warren Buffett and Dan Gilbert Unite in Bid to Acquire Yahoo
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Re: Warren Buffett and Dan Gilbert Unite in Bid to Acquire Yahoo
#2Doesn't Buffet famously stay away from Tech? What changed? He is buying Yahoo and has invested in Apple.
Re: Warren Buffett and Dan Gilbert Unite in Bid to Acquire Yahoo
#3Doesn't Buffet famously stay away from Tech? What changed? He is buying Yahoo and has invested in Apple.
Valuations dropped enough for it to be a sensible buy. Buffet stated before that he does not understand why tech valuations are so high based on the fundamentals.
Re: Warren Buffett and Dan Gilbert Unite in Bid to Acquire Yahoo
#4Doesn't Buffet famously stay away from Tech? What changed? He is buying Yahoo and has invested in Apple.
compare market cap to assets
Re: Warren Buffett and Dan Gilbert Unite in Bid to Acquire Yahoo
#5Doesn't Buffet famously stay away from Tech? What changed? He is buying Yahoo and has invested in Apple.
Valuations dropped enough for it to be a sensible buy. Buffet stated before that he does not understand why tech valuations are so high based on the fundamentals.
And he's quite right. Apple might be the exception because of their extensive cash reserves.
But if you look at Facebook or Twitter, it is hard to tell why they're selling for that amount.
I myself avoid index funds which over-invest in tech because I believe we're in a bubble.
Re: Warren Buffett and Dan Gilbert Unite in Bid to Acquire Yahoo
#6Doesn't Buffet famously stay away from Tech? What changed? He is buying Yahoo and has invested in Apple.
It sounds like he's just providing financing for a Gilbert-led group of investors. I don't know enough about private equity or Warren Buffett to know if that's still significantly out of character for him
Re: Warren Buffett and Dan Gilbert Unite in Bid to Acquire Yahoo
#7Doesn't Buffet famously stay away from Tech? What changed? He is buying Yahoo and has invested in Apple.
Probably valuations dropped low enough that yahoo can be valued as a classic media company instead of a tech company.
What generally scares Buffet from tech is that the price of tech stocks is greatly inflated to reflect expectations of future growth. Buffet is very skeptical of inflated expectations of future growth.
But I do not think there is any great expectations of future growth in yahoo. In fact many analysts say that if you strip out the valuable asian assets, the value implied by the market for Yahoo's US business is about zero or even negative.
So the answer is that Yahoo is not really a tech stock anymore, but the traditional definition of that term. At least it is not priced like a tech stock.
Re: Warren Buffett and Dan Gilbert Unite in Bid to Acquire Yahoo
#8Wonder if he'll bring a chunk of Yahoo to Detroit?
Re: Warren Buffett and Dan Gilbert Unite in Bid to Acquire Yahoo
#9Doesn't Buffet famously stay away from Tech? What changed? He is buying Yahoo and has invested in Apple.
Probably valuations dropped low enough that yahoo can be valued as a classic media company instead of a tech company. What generally scares Buffet from tech is that the price of tech stocks is greatly inflated to reflect expectations of future growth. Buffet is very skeptical of inflated expectations of future growth. But I do not think there is any great expectations of future growth in yahoo. In fact many analysts…
> the value implied by the market for Yahoo's US business is about zero or even negative.
Probably precisely why Buffet is interested in it.
Re: Warren Buffett and Dan Gilbert Unite in Bid to Acquire Yahoo
#10Doesn't Buffet famously stay away from Tech? What changed? He is buying Yahoo and has invested in Apple.
He is not buying equity in Yahoo, he is lending money to the actual buyer and will receive interest on that lending. (Which is much more secure)