Yahoo CEO Jerry Yang To Step Down 199
JagsLive was one of several readers to point out Jerry Yang's departure as Yahoo CEO. He's not leaving the company; he will return to his former role as Chief Yahoo, whatever that entails. Yang has been under fire in recent months from investors for his handling of Microsoft's recent acquisition attempt."Yahoo, under fierce financial pressure, has begun a search to replace company co-founder Jerry Yang as chief executive, the company said Monday. 'Jerry and the board have had an ongoing dialogue about succession timing, and we all agree that now is the right time to make the transition to a new CEO who can take the company to the next level,' Chairman Roy Bostock said in a statement."
Re:Dividends? (Score:5, Informative)
Only very few tech companies that are huge and have been around forever pay dividends. The only examples I can find in the tech sector that pay dividends are IBM, Intel, Sony and HP.
The entire point of a publicly traded company is to increase shareholder value. One easy way to do this is to simply give the share holders money in the form of dividends. The other choice is to invest back into the company. If the company is still growing then there's a good chance that investing $X million into R&D/employees/capitol improvements/whatever will result in the company improving it's market capitalization by more than $X mill. If that's the case, then that produces more value for the shareholder and is the proper choice.
Basically dividends, and stock buy-backs which are effectively the same thing, are an easy way out when a company has more money than it knows how to make useful investments with.
Re:Dividends? (Score:5, Informative)
I'm not sure what your question is really about. Certainly many companies -- and nearly all that have been around for any length of time -- are profitable. Yahoo is quite profitable, generating over $600M of profit last year. So in that sense I'm not sure what you mean by "speculative gamble". Yes the market moves quickly and companies' fortunes can rise and fall, but it's been that way since capitalism was invented.
With regard to dividend payouts. In a high-growth company, the investors often prefer the company to retain earnings to fund future growth opportunities. When there aren't enough high-value growth opportunities and the cash starts piling up, usually companies will then start paying dividends (Microsoft, for example).
Because of US tax law, it's actually better for most investors if the company uses extra cash to buy back its stock (thus reducing shares outstanding, and increasing the price of the shares that remain), rather than pay it out as a dividend. The former results in a capital gain, which presently in the US is taxed as low as 15%, while the latter counts as ordinary income. Many companies do stock repurchases, sometimes in addition to dividends: Intel and Microsoft for example. This is another perfectly legitimate way to give money back to the investors.
And the shares dropped that much anyway (Score:2, Informative)
So unless they cashed in (and why not cash in when Yahoo! shares were at their highest?) the result of the shares would have been nuked big time too.
PS IIRC, the $33 deal was shares rather than cash.
PPS is $10 a year for 10 years more or less than $33 one-off? Yang was looking for the 10-year payoff, not the August one.
Re:And the shares dropped that much anyway (Score:3, Informative)
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PPS is $10 a year for 10 years more or less than $33 one-off? Yang was looking for the 10-year payoff, not the August one.
Except that it isn't $10 a year for any length of time, the $10 share price is a once and done deal (once you sell your share for $10, you don't have it anymore). It was $33 one off when MS made their offer, and now it is $10 one off on the open market.
Re:Isn't it kind of sad (Score:3, Informative)
Saying that companies are there only to serve their shareholders, that is, only to make profits, is just a justification for all sorts of dirty business practices.
You may not like it, but that's how the world operates. People who invest their money (investors / shareholders) are the primary focus of the company. Customers really exist only to help the company to make money. Anything that is not illegal is allowed and is expected to be done if it furthers the goal of making more money. In fact, if the business managers do not do what is expected to make more money ("fiduciary duty [wikipedia.org]") then they can be sued and/or replaced by investors.