Sell 600 Shares Of Yahoo (YHOO) On 9/18/2014

I sold all 600 of my YHOO shares at a price of 42.05. I have a short term gain of $2,736. You can see gain detailed below (click for bigger picture).


Why I Bought YHOO 

You can read why I bought Yahoo stock by clicking the link but basically it was because I thought the stock would run up in anticipation of the BABA IPO. Yahoo owns about 24% of Alibaba and it is turning out that that IPO may be the biggest of all time. Investors, whether they are new or experienced, seem to be clamoring to buy BABA and the hype is off the charts. 

Yahoo stock has been going up because the higher Alibaba is valued, the bigger payday Yahoo will get. The more money Yahoo gets, the higher their stock may be valued by investors. I bought YHOO on two different days less than two months ago and the stock has been going up steadily which has made me very pleased. Its great when a plan actually works and I have a profit to show!

Why I Sold Yahoo Before the Alibaba IPO

I decided to sell a day before the BABA IPO because I honestly don’t know what is going to happen going forward with Yahoo’s share price. One would think that the higher BABA goes on IPO day, the higher Yahoo will go as well. But that may or may not be the case. There are may conflicting opinions about Yahoo and whether investors will stick with the stock or dump it (like I did). These are the scenarios that could happen:

1) Many/most investors of Yahoo are only buying the stock because of their 24% stake in BABA, not because they actually like Yahoo and feel it is a good company. So that makes it more likely that some investors will take their gain and sell real soon which could drive the stock price down. This is what I am mostly fearing and the main reason I sold my shares. 

2) If BABA has a blockbuster IPO that sees its price go much higher than the initial $68 price, YHOO stock may go up. After all, the higher BABA goes the more money YHOO will get. So, YHOO could see a nice pop up if BABA has a big up day the first day (as long as there aren’t a lot of sellers as detailed above).

3) YHOO could still be bought by some other company. This could happen soon or months from now. If that happened the buyout price would most likely be higher than Yahoo’s stock’s price now and its investors would be rewarded nicely. But something like Yahoo getting bought out is very speculative and I am not waiting around for something that may or may not happen. 

Bottom Line

The bottom line is that I have a nice gain that I wish to protect, I have no idea what will happen to Yahoo’s stock price once Alibaba goes public, Yahoo itself has a very poor business that I don’t want to invest in, and thus I have decided to be on the safe side and sell at this time. I may or may not regret this decision in the future but I have to do what my gut tells me is the right thing to do right now. My goal was to make money on Yahoo in the run up to the Alibaba IPO and that was accomplished!

13 Responses to “Sell 600 Shares Of Yahoo (YHOO) On 9/18/2014”

  1. Allen says:


    I’ve been following your stock buys and sells. You are an inspiration and it has motivated me to jump into the stock market. I’ve been saving for retirement for quite a long time, but the short to medium term investment arena is the area I am also focusing on. I too bought Yahoo, but have held on to it. Made some good money. Too bad you sold when you did, it has gone up quite a bit over time. But as you said, you made money, although could have been quite a bit more.

    I have softbank stock and just waiting for something to happen there.

    Thanks for doing this!

    • Bruce Alan says:

      Thanks for the kind comments and good for you for holding on to Yahoo. One thing I have learned throughout the years is that I just have to make the stock decisions I am comfortable with (like selling Yahoo at $42) and not look back too much because it can drive a person crazy!

  2. Ann O says:

    Dear Bruce,

    I’m so happy that your portfolio has done so well; you certainly deserve it! I checked in to see how Yahoo worked for you because I’m so grateful to you for helping me to get started in purchasing stocks online in anticipation of the Alibaba release. I had only about $1300 to invest but am up about $132 and am very happy. I’ve started to venture slowly into a mix that includes some more conservative purchases, too, but the important thing is that I’m finally saving again – and enjoying it! Thanks so much again, Bruce…Ann

    • Bruce Alan says:

      Thanks Ann,
      At first I was happy I sold Yahoo because the stock went down about $4 after I sold it. But now it has come back and is up more than $4 from the price I sold. Nevertheless, I made my decision (and made money) so I have to be happy. If I had not sold when I did, I might have bailed out and sold at a lower price when it initially went down. I shouldn’t look back and must look forward!

  3. Sri says:

    Thanks Bruce.

    Really Inspired by the way you have explained things here.
    I also want to invest in stocks but i dont have huge amount of money to invest and buy like 100’s of share.Planning to do in a small Manner . which is the best and trusted online brokerage which charge less for both sell and acquiring stocks.
    Also I am eagerly waiting for an article on best bet on cheaper stocks may be less than 50 ,like companies which stock prices are less now and expecting to grow.

    Thanks Again.

    • Bruce Alan says:

      OptionsHouse is about the lowest per trade at $4.75 and they are reputable. If you have $5,000 to fund your account with you can get 100 free trades in the first 60 days by clicking this link and signing up
      Free Trades at OptionsHouse

      The minimum to get the promotion is $5,000 but you can sign up with as little as $1,000 with OptionsHouse and although I have not used them, they do get good reviews from all the major financial magazines.

      Another alternative is TradeKing which has no deposit minimum and charges $4.95 per trade. They are also a well respected broker that has been around for a long time. Your money will be safe with them as well.

  4. Demetris says:

    Thank you Bruce. I bought some more YHOO stocks today and I will continue to buy as long as the price getting cheaper. I am sure this stock will rebounce

  5. Demetris says:

    Hi Bruce,

    I bought some YHOO stocks after reading your article ref BABA. The price of the YHOO stock went down. What do you think of the future price of YHOO.

    • Bruce Alan says:

      I sold my Yahoo stock (as the post details) because I don’t know what the future holds for Yahoo. Their core business has been failing for years and now they are getting this influx of cash from their ownership of Alibaba. Some “analysts” and “experts” say that YHOO is now undervalued and should go up. If BABA continues to go up YHOO should go up too, one would think. But that is not always how the market works and so whether Yahoo’s stock price will stall at these levels or go up further is something that many people are speculating about but no one really knows.

      • Demetris says:

        Thank you Bruce,

        The question is, if Yahoo is really holding 24% of Alibaba, why did Yahoo share drop at the first trading day of Alibaba which opened around 36% higher of the IPO price. It sounds like puzzle to me

        • Bruce Alan says:

          Yahoo no longer owns 24% as they were forced to sell 8% or some percent like that. Nevertheless, what you are seeing is indeed the “puzzle” of the stock market. If investors don’t like a stock, they don’t buy it and the price goes down even though a company may technically be worth more than the stock price. Stocks trade on supply and demand and if demand goes down, for whatever reason, the price will too. It appears investors (like me) sold their Yahoo and took their gains. They are not willing to wait around to see what Yahoo does with its new found money. This is how stocks can get undervalued (I am not saying YHOO is now undervalued but it could be) and they can get overvalued as well.

  6. Shuai says:

    I’m sure you are happy with your decision now Bruce.:)

Back to Top