NEWS AND COMMENTARY
March 8, 2001
Boo-hoo for Yahoo!
Yahoo used to be the darling of the Internet companies. When all other dot-coms fell off their pedestals, only Yahoo remained as a company with actual profits, and it was a company that consistently beat Wall Street earnings estimates to boot! For the second quarter in a row, however, Yahoo has had to lower earnings estimates. Now, the company only expects to break even. And, judging by last month's disappointing results, Yahoo could even dive into the red this quarter.
Yahoo's woes in 2001 are reflective of what's happening at most other companies. The economic slowdown has pummeled the majority of companies. Earnings, if there were any to begin with, have shriveled. And those companies that had no earnings before the slowdown are falling deeper and deeper into debt. And like Yahoo, none of the companies can predict what's in store for the rest of 2001. Or, more likely, they don't want to tell investors because they don't want their stocks to fall even more.
Yahoo's news was a kick in the teeth for the Nasdaq, ending a three-day winning streak for the tech-heavy index, and sending it sharply lower. There are plenty more Nasdaq stocks lined up to plunge off a cliff -- and you can bet shareholders won't feel like shouting "Yahoo!" as they plunge to the bottom.
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