Ongoing Campaign to Invigorate Yahoo(YHOO) and an Options Strategy

Eric Jackson's Campaign to create shareholder value at Yahoo (YHOO) continues.  He is still small relative to the total size of Yahoo but I hope he will continue to gather momentum.  Mr. Jackson is using every tool in the Web 2.0 arsenal; he's created a Wiki for the campaign, flickr group, a YouTube video channel and a of course his blog.

Let me say that I am a Yahoo fan.  For years MyYahoo.com has been my browser startup page; I pay to use Yahoo enhanced email; I have over 2000 photos on flickr; I find Yahoo finance to be almost as good as Bloomberg but without the $1800 a month pricetag; I have  even been using Yahoo's search recently and find it so greatly improved that I don't need Google as much.

In expectation that this campaign might gather more momentum and seeing that it is getting more press coverage, I recently added to my Yahoo (YHOO) position through a buy/write.  On Jan 17th I bought Yahoo shares at $28.97 and sold Jan 2008 35 strike calls for $1.95.  I have a net cost at expiration of $27.02 and will not have any upside beyond $35.00.  (As of today Jan 22, Yahoo has fallen to $27.50 and the options to $1.50.  This same buy/write could be had today for a much better net price of $26.00.)

I did a technocrati search for my blog and found coverage on the Plan "B" campaign from Publicidad y marketing en la red, a Spanish language blog.  My first appearance in Spanish. 

Here are the stats on Eric Jackson's Plan "B" for Yahoo taken from his Breakout Performance Blog.

Yahoo! "Plan B" Group Stats: As of 1/20/07

• "Plan B" Advocacy Launched: 1/7/07
• Current YHOO Shares Owned: 90K
• Current YHOO Shares' Value: $2.4MM
• YHOO's TSR since Launch: -0.36%
• GOOG's TSR since Launch: 0.53%
• NASDAQ's TSR since Launch: 0.70%
• Relative Shareholder Value Created to GOOG: ($21,706)

Disclosures and Confessions:  I own Yahoo andplan to pledge my shares to the campaign.  However, if the shares riseabove $35 I'm likely to start selling.  I'm short Jan 2008 35 strikecalls against half my position of YHOO and am also short Jan 2008 30strike puts. 

I like Yahoo!.  For years MyYahoo.com has been my browser startup page; I pay to use Yahoo enhanced email; I have over 2000 photos on flickr; I find Yahoo finance to be almost as good as Bloomberg butwithout the $1800 a month price tag; I have  even been using Yahoo'ssearch recently and find it so greatly improved that I don't need Google as much.

Disclaimer: Nothing in this blog is meant to be specific financial advice or arecommendation to buy or sell.  I do not give investment advice.  Doyour own research.  Do not rely on anything in this weblog to makeinvestment decisions.  I do not log all my trades here. I only describeor mention those that I think might be interesting. Consult aninvestment professional familiar with your specific financial situationbefore buying or selling any security.