It Starts: Tech Trouble Mucks up Silicon Valley Real Estate Party

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It Starts: Tech Trouble Mucks up Silicon Valley Real Estate Party
by Wolf Richter • January 3, 2016


[font color="blue"]Yahoo tries to “quietly” dump its Holy Grail property.[/font]

Yahoo has enough problems already. Hardly anything has gone right since its last big successful move, the strategic partnership in 2005 with Chinese e-commerce site Alibaba. Even as it blew billions of dollars on dozens of acquisitions over the last few years, its annual revenues shrank from $7.21 billion in 2008 to $4.62 billion in 2014, down 36% in six years, with not much hope in sight.

Management departures have been termed “Exodus” by re/code. Now that its efforts to spin off Alibaba have collapsed under the tax implications (didn’t they think about this before?), Yahoo said that it would try to spin off instead its core Internet business. Whatever.

“Activist investors” have sunk their teeth into Yahoo with their own proposals, without much success. Its shares, after languishing in the low teens following the 2008 crisis, began soaring in late 2012 in the hopes of an Alibaba IPO that would douse Yahoo in new riches. Its shares were also dragged along by the general stock market and tech euphoria. In late 2014, they broke the sound barrier of $50 a share – but then spent 2015 careening down 36%.

During the stock market bubble that peaked at about the time Yahoo’s stock peaked, all sins were forgiven. Fancy stories mattered. Newfangled metrics mattered. Realities didn’t. But something changed in 2015. The hot air started hissing out of these stories. The tech and startup bubble began wheezing. And IPOs stalled. It seems the party is over in tech land. Now there is talk of “pent-up supply” of IPOs – a gruesome term in a world with little demand for them. ..............(more)

http://wolfstreet.com/2016/01/03/it-starts-tech-trouble-mucks-up-silicon-valley-real-estate-party/