Verizon officially agreed Monday to buy Yahoo’s core assets for $4.8 billion, a defensive stock making an aggressive move, TheStreet analyst Gregg Greenberg says. That’s something the market generally appreciates, he told TheWrap.
Greenberg opined that Verizon was a “must-own” stock even before this deal, and now, potentially more so. That’s because the upside of acquiring Yahoo (sans its Alibaba interest, an important distinction when looking at market capitalization) to help Verizon boost ad revenue and compete more directly with Google and Facebook may not be mile-high — but the downside is negligible.
“Even if this deal goes sour, it’s really not going to affect Verizon too much,” Greenberg told us. In other words, he says this won’t be a “massive failure” on the level of the AOL-Time Warner bust.
After all, Yahoo is one of many mid-cap companies, Greenberg notes, explaining that we only care about it because of what YHOO used to be.
“You wouldn’t be talking about Yahoo if they made auto parts,” Greenberg stated, referring back to Yahoo’s sexy dot-com bubble heyday.
As for Marissa Mayer, the “5 Dumbest Things” columnist doesn’t seem super-bullish on her chances to remain atop Yahoo, despite the CEO’s stated intention to do exactly that. But that doesn’t mean the analyst thinks she’s undeserving of a shot.
“Marissa got dealt a bad hand. She got dealt a failing company — she tried,” he told us. Of course, not every move she made deserved a pep rally: “She was not a very good cheerleader, she overpaid some people,” Greenberg added.
“I think Wall Street was always skeptical of her,” he continued. “The fact that she was a woman probably didn’t help, because you have a lot of these private equity guys who like going against female CEOs.”
“When things didn’t work, they really jumped up and down all over her,” he concluded.
On Friday, when a deal seemed likely, both Yahoo and Verizon (VZ) stocks saw share-price increases. They each came back down to earth today, after the deal was made official.
Here are five-day snapshots of their recent trading: