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Yahoo Shareholder Urges Sale

Wednesday, December 10th, 2008

Yahoo (YHOO, $12.83, up $0.64) is trading higher this morning after one of the company’s largest shareholders has made a plea for the company to pursue a sale of its search unit to Microsoft (MSFT, $20.77, up $0.17). Ivory Investment Management owns a little over 21 million shares of Yahoo, or about a 1.5% stake, and like everyone else who owns Yahoo stock, Ivory is growing tired of Yahoo’s antics.

Ivory said Yahoo could get about $15 billion from Microsoft for the search platform alone which would put the stock at $24 to $29 a share, if a deal got done. In a letter to the company’s board, Ivory proposed a deal in which Microsoft would acquire Yahoo’s search engine and Yahoo would retain 80% of the revenue generated by search queries on its own site. In other words, Ivory is pushing for a double from current prices.

We have been following Yahoo’s troubles all year long and its hard to get excited when something like this pops up. If Microsoft really wants to get something done, it would have been aggresively buying up Yahoo’s shares when the stock was under $10. Perhaps Microsoft is waiting for a total collapse on Yahoo’s part and will pick up the pieces when we least expect it.

Rick Rouse
Rick@OptionsMentoring.com

Tags: Ivory Investment Management, Mcrosoft, search engine deal, Yahoo
Posted in Yahoo / Microsoft | No Comments »

Black Friday Update

Friday, November 28th, 2008

The market is closing at 1PM today and we’ve got about a half hour to go. Here’s what we’re watching:

Citigroup (C, $8.27, up $1.22) has moved above $8. This was my near-term target for the stock and the December 5 calls (CLP, $3.40, up $1.00) are now deep-in-the-money and are trading in tandem with the stock. Many of you got into this position for under a $1 as the calls traded to a low of 60 cents last Friday. Set stops at $3.00.

Chesapeake Energy (CHK, $16.95, down $3.29) is down over 15% as they plan to sell stock to raise nearly $2 billion in cash. Talk about diluting shareholder value. The December 17.50 puts (CHKXW, $2.10, up $1.15) are up 120% and opened at $1.65.

Yahoo (YHOO, $11.00, up $0.42) is up today on news that Carl Icahn is increasing his stake in the company. Apparently he has been buying shares this week and has plunked another $70 million down. More on this story next week.

Ford (F, $2.68, up $0.53) and General Motors (GM, $5.29, up $0.48) are getting nice pops. I’m hearing the two companies could be meeting around December 8 with Congress again and there’s a good chance they get some bailout bucks.

The Ford December 3 calls (FLG, $0.31, up $0.09) have traded over 20,000 contracts while the GM December 5 calls (GMLA, $1.00, up $0.15) have traded nearly 6,000 contracts. These two options could post huge gains if Ford and GM continue to rally. If Ford can get to $4 over the next week or two, the December 3 calls will be worth at least $1, or a triple from current levels. If GM can get to $8, same return. Big risk but big reward if you get in these options but I do like them.

Looks like the Dow is headed for its fifth straight winning session.

Rick Rouse
Rick@OptionsMentoring.com

Tags: Black Friday, Chesapeake Energy, Citigroup, Ford, GM, Yahoo
Posted in Company Commentary, Market Analysis | No Comments »

Yahoo's CEO Steps Down

Tuesday, November 18th, 2008

Jerry Yang might not be Yahoo’s CEO anymore but he did stay at a Holiday Inn Express last night. Shares of Yahoo (YHOO, $12.10, up $1.47) are up nearly 15% today on news that co-founder Yang will step down from his CEO duties once the company finds a replacement. In what has been one of the worst performances Wall Street has ever witnessed, it is hard to believe that dude is stepping down after blowing up the company right in front of shareholders.

Yahoo shares have lost 60% of its value since Yang took over last year. His claim to fame will be the botched deal with Microsoft (MSFT, $19.33, up $0.14), which had offered $33 per share, or $47 billion, to buy the company. The departure of Yang now clears the way for us to get a clearer picture on what Yahoo’s plans will be.

Although Yang will remain on the company’s board, the new CEO will likely give hints as to what direction the company will be taking. Will Yahoo actively seek a merger or will it try and remain independant? No matter what happens, somewhere, Carl Icahn has to be smiling.

The Yahoo November 11 calls (YHQKK, $1.27, up $0.70) are the most active in the November call chain. For December, option traders seem to be targeting the December 13 calls (YHQLM, $1.30, up $0.50). One would expect Yahoo to fade as the day wears on but sentiment could be changing on Wall Street.

Rick Rouse
Rick@OptionsMentoring.com

Tags: Jerry Yang, Microsoft, Yahoo
Posted in Yahoo / Microsoft | No Comments »

Yahoo Jumps Despite Google Changing Mind

Thursday, November 6th, 2008

Yahoo (YHOO, $13.92, up $0.57) was back in the news again on Wednesday. The stock had a strong day despite the fact that Google (GOOG, $342.24, down $24.70) backed out of its advertising outsourcing agreement with the company. At one point, Yahoo traded as high as $14.84.

There were many on Wall Street who had speculated this deal would fall through mainly because Google didn’t want to have to deal with the anti-trust issues. That was loud and clear when Google’s legal rep had this to say:

“We’re of course disappointed that this deal won’t be moving ahead but we’re not going to let the prospect of a lengthy legal battle distract us from our core mission. That would be like trying to drive down the road of innovation with the parking brake on.”

Sweet analogy.

Of course the bulls and bears immediately began to battle as bulls are hoping for another bid from Microsoft (MSFT, $22.08, down $1.45) while the bears are saying this is the end for Yahoo. What? You think it’s a coincidence that Yahoo’s CEO Jerry Yang had this to say after the closing bell: “To this day, I believe the best thing for Microsoft to do is to buy Yahoo,” ..

Yeah, that dude is drowning and begging Microsoft for a life jacket. Yahoo had an easy $33 a share, or nearly $48 billion in its back pocket when Microsoft was really wanting to buy the company and Yang held out for a few dollars more a share. It’s amazing sometimes how egos can get in the way of doing what is right for a company. This is a clear example of why America needs more shareholder rights. Afterall, you are not just buying stock of a company, you own part of the company when you buy stock. Shareholders could have gotten $33 a share a few months ago, now they will be lucky to get $20. It is what it is but Yahoo blew its chance of doing what was right for its shareholders.

The January 17.50 calls (YHQAW, $1.25, up $0.35) were one the plays we had in our Lottery portfolio. These calls were profiled around the same price that they are trading at now but did trade as high as $1.40. The November 15 calls (YHQKC, $1.30, up $0.80) were certainly a huge winner as they advanced 150+%. They traded as high as $1.38.

Yahoo’s rally was driven, in part, by rumors that Yahoo and Microsoft are close to an agreement of $17 to $19 a share — speculation that both companies denied. I had mentioned that companies are getting “cheap” again that would could see some M&A (merger and acquisition) activity. Chesapeake Energy (CHK, $24.83, up $1.88) and Yahoo are making the rounds and there is even fodder that Disney (DIS, $24.23, down $1.79) should buy Electronic Arts (ERTS, $22.37, down $1.03). M&A is coming and when it does it could be fast and furious.

I think Microsoft will make another run at Yahoo and I would expect it to be sooner rather than later. Microsoft still wants Yahoo but is trying to get it as cheap as it can. Microsoft is a cash cow and it needs Yahoo’s search engine and huge audience if it ever wants to mount any serious threat to Google.

The November options are a big risk as time would be working against you waiting for this marriage to happen. The contracts expire in 15 days and I don’t think anything will get done that quick. It could but that is why we went out to the January options from the get-go. If Yahoo gets a minimum $20 bid then the January 17.50 calls would be worth at least $2.50 or a double from current levels if Microsoft comes in with that kind of bid.

Maybe by Christmas a deal gets done but I have been telling you the $33 bid from Microsoft six-months ago would continue to haunt Yahoo shareholders once Yang blew it.

Keep holding the Yahoo call options and remember that they are a lottery play. You could take the profits you have now but it would be like winning $5 on a $5 lottery ticket. We are at least trying to double our money.

Rick Rouse
Rick@OptionsMentoring.com

Tags: Chesapeake Energy, Disney, Electronic Arts, Google, Jerry Yang, Microsoft, Yahoo
Posted in Google, Yahoo / Microsoft | No Comments »

Lottery Portfolio Update

Sunday, October 19th, 2008

Here’s an update from the lottery plays I profiled last Monday:

Entry Exit Current Action Expiration

Microsoft (MSFT, $23.93)
April 25 calls (MSQDE) $2.35 $2.90 $3.00 Hold 4/17/09

Google (GOOG, $372.54)
March 500 calls (GOPCO) $11.50 $15.00 $17.00 Hold 3/20/09

Yahoo (YHOO, $12.90)
January 17.50 calls (YHQAW) $1.30 $1.20 Buy 1/16/09

J&J (JNJ, $62.65)
Nov 60 calls (JNJKL) $3.30 $6.60 $4.70 Sell 11/21/08
April 70 calls (JNJDN) $1.50 $3.00 $2.75 Hold 4/17/09

Goldman Sachs (GS, $114.30)
January 125 calls (GSAE) $7.25 $15.00 $10.90 Hold 1/16/09

**Microsoft has a 25% stop above the $2.35 entry and would be attractive if the calls fell back to $2.35.

**Google had a sweet Friday, up nearly $20 for the day and hitting a high of $386 in the process. The October strangle two-day option trade was a huge success as it returned 100+%.

**Yahoo spiked to $13.73 on MSFT talk and the calls hit $1.50 before fading. I will be miffed if Yahoo is still solo by the end of the year.

**Johnson & Johnson was an awesome trade for the November calls and I don’t recommend any new positions in them as they returned 100% before slipping to current levels. The April calls still look good.

** Goldman Sachs rallied to $128 last Tuesday and the October 100 call options were a monster trade returning well over 100%-200% gains!

**Arch Coal (ACI, $24.15), Massey Energy (MEE, $23.30) and Patriot Coal (PCX, $16.61) were all stopped out with 20%-25% gains but I wouldn’t be a buyer of the November options anymore so I didn’t even list them.

Rick Rouse
Rick@OptionsMentoring.com

Tags: Arch Coal, Goldman Sachs, Massey Energy, Microsoft, Patriot Coal, Yahoo
Posted in Company Commentary | No Comments »

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STEVE T.
Rick, I appreciate the advice. I think I will just sit back and utilize your selections only for awhile. This will obviously save me a great deal of money in commissions. I have gone thru your entire site including the video on money management. This has brought me to the stark realization that I have been trading too much for too little. I definitely have not been "swinging for the fences", but I also think I have been getting impatient with trades and getting out too fast. This has no doubt caused me too trade too much. I like, and definitely agree on, the advice on money management. Thanks for the help.

SCOTT H.
Thank you!!! I held on to the NFLX position since Nov. 13 at a cost of $1.89. Sold ½ on April 14th for a 540% return and the other ½ upon earnings for 702% return. Total profit of $11,615 a 621% return. Keep the recommendations coming and thanks to you and your team for the service you provide.

PETER G.
Rick & Team, GREAT Call on NKE for my two trading accounts:
1) Entry at .65, out at 1.45, 1.55 Profit = $415
2) Entry at .60, out at 1.75, 1.50 Profit = $485

LAWRENCE O.
Hey Rick! Here is an update on what your picks have done in my accounts.

1) Great call on the JoyG March 55. I bought when you said, then bought again on one of the dips. Booked 80+% profit. Made enough to pay for your service for years to come.

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3) Took profit on your Imax March 12.5. 20 cent trailing stop at 1.90 yesterday. Not sure what the profit on that was, but profit is profit.

I see that you took a loss on some of these. It’s all good. I look to trade your “ideas” not your exact calls. I THANK YOU! For your ideas and commentary. Keep up the good work. And keep those ideas coming.

C.J.
Loving this subscription so far! I got into the BRK feb 76 calls the day you talked about right before the split...now up over 300% (0.70 to 2.475)! Keep the good picks coming and let's see some OSIS and EMC upside soon! Just wanted to share my positive enthusiasm on your newsletter...it gives us individual investors great ideas on not only the options market, but also the broader equity market! Case in point is BRK...I can't always read the breaking business news but its easy to read your twice daily updates on my smartphone...helped me get some BRK shares immediately after the split which I will hold for the long haul! Thanks again!

SHAUN
Aloha Rick - Thank you so much for the great CL pick. I am not sure if there was buy-out/merger news or what but at 3PM today Colgate-Palmolive absolutely EXPLODED to the upside, and my calls turned into green candy when they went from 1.40 to 3.8 in a matter of seconds! I even sold a few for over 4.0! Much thanks and keep the solid picks up my friend, honestly. Only a fool would scoff at 267% gains... Peace!

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I like the fact that you ask for comments from subscribers. Good customer service. By the way, am enjoying the service so far. Some good
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Woo hoo! Out for 50% on WMT this am. Making up for my depression for getting out of pcln for a 30% gain monday :( you the man! any word on the manual? My friend Mike ( who I sent to your service) told me he emailed you about your integrity in reporting fills. I echo that sentiment big time.. keep it up! Cheers!

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Hi, good morning. I jumped the gun a little on this one (PCLN). But still made $1,675.00 profit!! Very happy!! Keep up the good work!! Thanks.

MIN L.
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Rick - I wanted to say thanks for getting me started on the right foot with your service. I have made six trades since starting on October 22, 2009. Five are winners and One loser netting me $6,245. Thanks again and keep the trade recommendations coming.

NOEL
I got into the Nike 60 Call at 1.85, sold at 5.00, also bought a 55 put at 1.05, but got stopped out at .35. What a ride! $2830.00 in the black even with the put. It's right at 100% return. I hope earnings season coming up is going to look like this trade.

TODD F.
Nice call on Nike. I think I'll go buy a pair with my profits! : ) I did the straddle for safety but still made 62% on the trade. Not bad for less than 24 hours. If Goldman is right, then the Nov 70s or 75's could be a steal today.

PAUL H.
What a sweet way to get introduced to Momentum. My first trade based on your picks and it a 2X. Thank you!

NOEL
“Limit order was set at 1.60 on RIMM so it sold. I may have left some money on the table but you can't go broke making a profit. That was a fun trade. Thank you. Good call. I’ve been watching and trading Rick's advice since March. It’s usually a fun ride, but I give him heck when it's wrong to. :) ”

CHRISTIAN
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“I made $420.00 on ANF in 2 days. Thanks for the trade and updates on getting out of the trade.”

CHARLES M.
“I did follow a lot of your trades with 1-2 contracts per trade and YTD I’m up 108%. I try not to follow blindly by not entering all of your trades and sometimes entering the ones you don’t. I entered AIG a few weeks ago against recommendation – that one hurt.”

BRYAN C.
“I have been following you for several months and am interested in the new service. I hate to see the free service go away but as they say, “all good things must come to an end”. My ability to join will be greatly influenced by the monthly fee so I’m very curious to see the new prices. Thanks for making April a great month for me and my family.”

JOHN H.
“I have really enjoyed the past month since finding your blog. You have made some great calls. I would appreciate info. on the new options mentoring program. Thanks.”

JEFFREY
“Hi Rick, I have been following your blog for several months now and I would like to be including on the list for your new service and to receive more information about it. And yes I was a Dendreon winner with your tips. Turned $280 into $7700, and literally saved my butt.”

ED
“I made over 6k on your Dendreon trade, and I’m very interested in learning how you pick and trade options. Sign me up.”

GREG
“Rick – Wow what a day! I got in at the Dendreon calls at $2.25. Thanks to for your advice. I appreciate that. This company has a lock on this type of therapy and no one else in the world is close. Kind of reminds me of the type of companies that Peter Lynch and Warren Buffet suggest that investments be made in. Companies that can build a moat around their business model, that allows them to charge a premium for their product or service. In other words - a monopoly.”

KEN
“Hi Rick, Thank you so much for the Dendreon trade, I made almost $10,000 with that trade with a little over $2,000 investment. You have shown me the power of options trading. Again, thank you so much for all your inputs.”

GARETT
“Hi Rick, thanks for the encouragement to play the dendreon calls! did freaking great! Got in the first lot at $1.44 on 3-24-09, sold at $2.45, 70% not bad. Bought it back at $2.30 on 4-7-09 closed out on 4-14-09 for 454% gain! Wow! I love it when that happens. So, thanks the encouragement to get back in when others were saying sell, sell, sell. Keep up the good work.”

TERENCE
“Rick – Thanks for Dendreon – it has made all the headlines today! I missed on RIMM earlier, but I’ve been holding onto DNDN calls since 3rd week March. Of course today it all paid off today, as DNDN rocketed up.”

Jan. 31 2012
Rick, new member...Studied all current trades, did some chart work,picked ZNGA, PEP, MGM...Sold on Feb. 2 for $3600.00 profit...Cost for 1-year membership to your newsletter was less than $1000.00..All I have to say..Thank you. John H –

3/18/11
Rick, I purchased 10 contracts of the Nike March 85 puts Thursday afternoon for $2.00. Thing is, I was upset because the puts went down to $1.60 or so before the market closed. Well, needless to say Nike didn’t impress Wall Street and when I turned on the computer this morning the puts were worth $7.10! Sold them for a $5,100 profit!. Thanks again, you are the MAN. Chuck J-

2/3/12
Hi Rick,

I will start off with a thank you for your time and dedication to all
the research you and your team commit yourself to. This is not me just being excited about the profits I have accumulated aka (bank) ! You have helped me get back to the passion I had of researching stocks/options. Keith N-

Hi Rick,

I want to share my great results on GMCR. Based on your comments on February 15th, I bought 20 options at $0.28. They closed today at $7.00, which is a 2,300% gain. My $560 dollars turned into $14,000 in less than a month. In decades of trading, this is my single best trade ever. Thank you! By the way, the Dow was down 228 points today and I could care less. What a great trade. It proves the amazing power of options. I am so grateful for your service, which calls it straight all the time, your options trading manual, and most of all, your amazing skill
at finding winning trades. I have attached a copy of the trade from
my brokerage screen.

Posts Tagged ‘Yahoo’

Yahoo Shareholder Urges Sale

Black Friday Update

Yahoo's CEO Steps Down

Yahoo Jumps Despite Google Changing Mind

Lottery Portfolio Update