14 DAY TRIAL // Yahoo has announced plans to buy back privately owned stock worth $3 billion over the next three years. The company is sitting on a decent amount of cash and with stock prices continuing to fall, Yahoo figured it might as well take advantage of that and get its hands back on some of its shares. Generally, these types of moves are not particularly well regarded by investors, but the announcement did drive share prices up slightly.
“On June 24, 2010, the Yahoo! Board of Directors approved a new stock repurchase program. Under the program, Yahoo! is authorized to repurchase up to $3 billion of its outstanding shares of common stock from time to time over the next three years. The repurchases may take place in the open market or in privately negotiated transactions, including derivative transactions,” the Securities and Exchange Commission filling read.
Yahoo stock has been falling steadily for the past year. While the tech industry at large has had a rough time lately, Yahoo is performing particularly poor, especially when compared to the other Internet giants. Yahoo share prices have dropped 9.8 percent in the last month and 11.6 percent in the last year.
Interestingly, Yahoo is already running a program of stock buy-backs, started in October 2006 and set to close in late 2011. Now it’s putting another $3 billion of its cash reserves on the line for this. Yahoo had about $4.2 billion in cash or equivalents at the end of last quarter.
Most analysts are seeing the move in a bad light as a sign that Yahoo has no idea what to do with its money other than this. It indicates that it has no big plans, no major acquisitions or new products on track which would require a serious monetary investment. With the Yahoo revamp still underway and with no huge successes or signs of improvement, the company isn’t looking in great shape at the moment.