Yahoo's stock hits new 52-week low

Internet pioneer's stock falls under the previous low of $18.58 a share, raising questions about whether any catalyst exists that could lift it from its near-term slump.

This post was updated at 1:12 p.m. PDT with the closing price of Yahoo's stock and other related information.

Yahoo closed at $17.75 a share Thursday, marking a new 52-week low for the Internet pioneer and raising the question of whether any near-term catalyst exists that could revive the battered stock.

Yahoo, which was Nasdaq's most actively traded company, closed down 5.38 percent over the previous day during the regular trading session.

The new figure is below the previous 52-week low of $18.58, which it reached in late January--just before Microsoft announced its unsolicited buyout offer of $31 a share on February 1. Yahoo rejected that bid, arguing it undervalued the company. Months later, Yahoo also dismissed Microsoft's sweetened $33 a share offer, countering with a requested bid of $37 a share. Microsoft, subsequently, pulled its buyout offer.

Yahoo's share price performance not only pushes it past the 52-week mark it was trading in January, but also knocks it back to a level not seen since early October 2003. And while some investors may note that Yahoo was knocked about with the rest of tech stocks--as the tech-heavy Nasdaq took a beating Thursday--it may not cushion the pain of what could have been.

With Microsoft no longer in the picture, investors are wondering what, if any, catalysts are on the horizon.

In the coming weeks, Yahoo may be receive early indications as to whether federal antitrust regulators oppose its controversial search-advertising deal with Google . State regulators are expected to weigh in with their decision this fall .

Wall Street is largely expecting the deal to go through, so any upside to Yahoo's share price would likely be minimal if the Department of Justice gives it the green light, analysts say.

"A DOJ approval would be mildly positive for the stock," said Mark May, an analyst for Needham & Co. "It has a greater than 50 percent chance of being approved, so it's already baked into the current stock price."

Yahoo's third quarter comes to a close at the end of September. Analysts aren't anticipating any major upswing surprises in its financial performance, they note.

And anything absent of a sea change in the monthly Nielsen Online search rankings will have minor effect on the stock.

"Unless there's a material change in market share, it's hard to see a single data point from a third-party metrics provider serving as a catalyst," said Derek Brown, an analyst with Cantor Fitzgerald.

Yahoo's pending advertising management platform (AMP) launch is a wild card.

"It's unclear what impact it will have over time. It depends on what happens with the rest of the economy," Brown said. "If AMP is wildly successful and it's perceived that Yahoo is taking advertising wallet share, then that could move the stock. But the possibility that will happen in the short-term seems very low."

Potential drivers of Yahoo's share price could be the sale of its investments in Yahoo Japan, as well as in Chinese search site Alibaba, or a buyback of its shares, noted Steve Weinstein, an analyst with Pacific Crest Securities.

"All of these things could potentially happen," he added. "But the question is: can they execute going forward and take share in a meaningful way from Google, MSN, or anyone for that matter?"

 

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