Yahoo shares reach 18-month high as investors warm to new CEO
Marissa Mayer's appointment appears to have buoyed Yahoo investors.
Yahoo shares reached their highest level in a year and a half, as investor confidence grows that new CEO Marissa Mayer can pull off a comeback that eluded three of her predecessors.
The internet pioneer has yet to actually provide Wall Street with any hard evidence that its business is turning a corner - and she has warned that it will be a lengthy job - but investor faith in the ex-Google executive is running high.
Hedge funds Tiger Global Management and Greenlight Capital Management recently disclosed large stakes in Yahoo, accumulated during the third quarter.
"Money managers are staring to want to own this name again," said Colin Gillis, an analyst with BGC Partners.
"For the amount of traffic they have, and the assets they have, they should be able to squeeze some value out of that," Gillis said, referring to Yahoo.
Google people wouldn't be following her if they didn't think she had some good cards to play.
With Mayer at the helm, he said, Yahoo has "finally got somebody who the market believes can do that."
Gravity Capital Management's Adam Seessel said that Mayer's recruitment of various Google employees, including recently hired Yahoo chief operating officer Henrique de Castro, has also helped burnish Yahoo's image.
"What the market is seeing is not (financial) numbers so much as they're seeing people voting with their feet, people moving from Google to Yahoo," said Seessel, whose firm owns Yahoo shares.
"All these people from Google wouldn't be following her if they didn't think that she didn't have some good cards to play," he said.
Shares of Yahoo finished Monday's regular trading session up 2.8 per cent at $18.36, amid a broad market rally. The last time Yahoo traded above $18.30 was in May 2011.
Yahoo ranks among the world's most popular websites, with roughly 700 million monthly visitors. But the company's revenue has eroded, amid competition from Google and Facebook and an industry-wide change in the online advertising market that has compressed prices for the online display ads that are key to its business.
The company has been rocked by internal turmoil: CEO Carol Bartz was fired over the phone and CEO Scott Thompson left after less than six months on the job due to questions about his academic credentials. Mayer, Google's first female engineer, took the top job at Yahoo in July.
In a conference call with investors last month, Mayer said that making Yahoo's online products more smartphone-friendly was her top priority.