Jerry Yang Steps Down as Yahoo CEO – With Charts

Nov 17, 2008: 10:45 PM CST

CNN News just reported that current Yahoo! CEO Jerry Yang will be stepping down and his replacement will be named soon.  Let’s review this news and look at the current and past charts of Yahoo stock.

From the CNN article, Yang stated, “”I will continue to focus on global strategy and to do everything I can to help Yahoo realize its full potential and enhance its leading culture of technology and product excellence and innovation,”

After the replacement is named, he will then be known as “Chief Yahoo”.  Yang founded Yahoo in 1994 and has grown into the #2 most popular search engine, eclipsed only by rival Google (GOOG).

This transition is not unexpected, and the news was greeted with cheers by some.  Technology analyst Rob Enderle declared “The shareholders were ready to pick up pitchforks and torches.  If Jerry wasn’t a founder, he already would have been gone months ago.”

Only a few months ago, Microsoft (MSFT) CEO Steve Ballmer offered to buy Yahoo for $33.00 per share, an offer CEO Yang declared as “too cheap” for Yahoo – he demanded at least $37.00 per share, a figure Microsoft was unwilling to pay.  Many shareholders were stunned as Yang refused the offer, seeing Yahoo (YHOO) shares surge then plunge… and now shares currently (as of this writing) trade just above $10.00 per share (which will change as we face Tuesday’s market open certainly).

The CNN report hints that Yang’s “tenure as CEO is unlikely to be remembered fondly by shareholders….”  Perhaps that is an understatement.

Let’s view the weekly and then daily charts to see the roller coaster ride Yahoo (YHOO) investors have endured recently.

Yahoo (YHOO) Weekly Chart:

I’m actually going to take off the ‘technical analysis’ hat and focus on the initial Microsoft offer of $31 per share in February 2008 (later raised to $33), Yang’s refusal of this more than generous offer (the stock was trading beneath $20 per share at the time of the offer), and the subsequent (recent) share price plunge as a result of Microsoft (MSFT) withdrawing the offer, and talks with Google failing.

What might have happened had Yang and the board accepted the $33.00 per share deal?  Investors and historians might look back and proclaim holding out to be an expensive $4.00 mistake.

The offer was withdrawn in May 2008 and Yahoo stock has never even remotely looked back from those levels near $30.00 per share.

Let’s take a brief look at the damage that has occurred since May 2008.

Yahoo (YHOO) Daily Chart:

Bear in mind, technology stocks across the board including Google (GOOG), Apple (AAPL), Baidu (BIDU), Research in Motion (RIMM) and many others have suffered greatly in the 2008 ‘bear market’ declines as the US and global economies deal with recessions.  It’s absolutely unfair to attribute all losses in Yahoo stock to Mr. Yang’s decision – I’m being facetious to do so.

Nevertheless, the ‘price picture’ or chart of Yahoo on the daily timeframe is a classic text-book example of a downtrend, with key moving averages serving as overhead resistance and volume accelerating as price continues to move to new lows.

I’d expect a pop in shares as this announcement is discounted into the market on Tuesday, but one can never be certain which way shares will trade on the news.  This market has shown many times that classic expetations have been off-base more than a few times as price continued to slide to new lows on various stocks and the broader indexes.

Continue to watch these stocks mentioned above and how they trade on this news – and what the effect (if any) may be on the broader market tomorrow.

4 Comments

4 Responses to “Jerry Yang Steps Down as Yahoo CEO – With Charts”

  1. adam hartung Says:

    Yahoo! needs a new leader that will Disrupt and use White Space to chart a new course. Someone who will compete with Google and improve the web for all of us. Certainly not Microsoft – a new leader wtih the moxie to compete. Read more at http://www.thephoenixprinciple.com

  2. busby seo test Says:

    he really should get down. Yahoo must look for a more responsible CEO.

  3. My blog ( David ) Says:

    He made a mistake in not trying but I doubt it would have passed anti trust in any case. Yahoo was weak technically anyhow so its fall is not surprising. I think Yang is taking the fall for a bear market.

  4. Cris Cohen Says:

    In a sign of how things are going at Yahoo, I’m betting his email to employees didn’t make it past the Yahoo spam filter and now sits in everyone’s junk mail folder along with ads for hair restoration cremes.