> approximately 15 percent equity stake in China’s Alibaba Group Holding Ltd

15 percent of Alibaba is about $52.5 billion. I'm not sure why we're even discussing anything else. It's like saying that my contribution to family finances is:

a) not selling my parents' house, which is now worth half a million.

b) having $1.32 in change in a little ashtray by the door.

As a long time Yahoo mail user, I was very disappointed with Yahoo under Mayer. Firstly they did a terrible job with the Yahoo mail web client; it became slow and clunky and inherited the worst parts of Gmail and none of the good parts. Secondly my account was hacked and to this day my old contacts still receive spoof emails from "me" (though not actually my email address) about weight loss supplements.

I am ashamed to tell people my email address. I started moving to Gmail.

Yahoo and LinkedIn are basically right next door to each other and employees from one routinely hop to the other, so it makes sense that they share production values.

Core Yahoo was actually worth a negative amount when comparing its market cap to the market cap of the Alibaba assets.

c) crashed the car that was worth $50,000 but is now worthless

And in comparison to actually growing a company that is worth a similar amount its childs play,

https://www.engadget.com/2014/05/20/what-ever-became-of-micr...

By 2001, MSFT had 18 million shares of Apple, sold by 2003. Later a 2:1 and then a 7:1 stock split, would give them a value of $36 billion today (if my math and the article's math are correct), but was sold for a relatively small profit instead.

It's harder than you think to hold onto a massive amount of shares in a growing company.

" The average investor lost money in the Fidelity Magellan fund under Peter Lynch’s tenure during a period of time when the fund returned around 29% annually."

http://www.innovativewealth.com/wall-street-wisdom/individua...

It's easy to look back and say, wow, if I had invested at that time, I'd have $x m/b, but the temptation to "lock in gains" or "diversify" is really strong. And sometimes it is right!

The link you provided is just one persons essay.

And sometimes people sell for other valid reasons, they need the cash even though they think its still a good long term investment.

The original point was that yahoo and marissa meyer hardly set the business world alight by holding (not even buying), just holding, alibaba shares.

Well, that makes two more links than you've provided.

Sorry, can't find an original source link online (it was from before the interwebs, after all), but here's another with more quotes from Lynch, and google will find lots more:

http://ivanhoff.com/2016/10/23/five-market-insights-from-pet...

Yahoo definitely was successful with the Alibaba investment, whether through luck or good decision making - though I agree, the rest of their decision-making lends weight to the "luck" evaluation.

No dispute at all that they showed no competitive advantage in managing their actual business.

There must be millions of people around the world who have bought and held growing assets, my fucking dad did and he is no warren buffet.

I have absolutely no back up evidence of this, but you don't either. One blog, now two blogs neither of which are peer reviewed or provide any form of source data. This second blogs just quotes someone else.

Its hard to hold on to a growing asset ? I really don't think it is. Unless you desperately need the money for something more important.

https://www.forbes.com/sites/parmyolson/2014/09/30/how-jerry...

Alibaba forced Yahoo to sell a sizable part of their position against their will, under threat of what might happen otherwise.

Then Alibaba, specifically Jack Ma, stole roughly $30 billion from Yahoo and Softbank by removing Ant Financial (and directly transferring ownership to himself [1]) from Alibaba without proper compensation to Yahoo and Softbank. You can't do anything about that sort of extraordinary theft in China, so that was that. And now about half or more of Ma's wealth is made up of what he stole from Yahoo and Softbank shareholders in that maneuver (out of his $40 billion, roughly $20-$21 is Alibaba, the rest is Ant Financial).

[1] per Bloomberg: "Ma controls Ant Financial through two China-based holding companies, Jun Han and Jun Ao, which own 42 percent and 34 percent of Ant Financial respectively, according to Alibaba's 2015 annual report."

From my crude timeline (below), I'm assuming that YHOO was more concerned about Alibaba (PrivateCo + Chinese jurisdiction) embezzling the rest of the assets, not that Alipay was extremely valuable and en route to becoming the most valuable private company in the world -- which it did!

2014: Alibaba goes public with IPO...

2011: Alibaba spun off Alipay and settles with Yahoo for 37.5% of Alipay (with $2-6B contingency clause should Alipay undergo a liquidity event.) This is after Jack Ma got tapped on the shoulder by the Chinese government and told he needs to comply with new regulations for third-party payment services. Or at least, that's Ma's story.

2001: Yahoo purchased 43% ownership of Alibaba in exchange for Yahoo China and $1B

I don't follow Yahoo! that closely, so the below is primarily based on headlines I've seen in the past few years... let me know if I have butchered any of the details. The bulleted points quote Mayers' statement.

* We became 1 of 3 internet companies in the world with more than 1B monthly users * We grew our monthly mobile users to more than 650M (one of the largest in the world) by launching and improving our products for mobile devices

Translation: We rode the wave of massive Internet trends, with negligible profit taking, and are now taking credit for the aforementioned trends, which every global Internet company experienced.

* We dramatically focused our product strategy, dispensing 150+ subscale products and features

Translation: We admitted that a large part of our holdings/investments were non-performing or ill-advised.

* We invested in search, building an offering that drew on strengths from Microsoft, Google and Yahoo, to provide dramatically improved search to our users and attract impactful partnerships, like Mozilla

Translation: We admitted total defeat in the business most consumers still think of as defining us, to the point that we now resell the services of the competitors who won.

* We fundamentally improved Yahoo Mail, completely rewriting much of the infrastructure to provide a far more flexible and reliable system, while creating a robust mobile offering. Mobile Mail recently surpassed desktop Mail in daily users, which shows the power of the product and the platform we reinvented

Translation: After taking for granted one of the few Yahoo products with a lot of users, we finally started adopting the UI patterns that allowed our competitors to outdo us in new user acquisition. But we managed to make headlines for confusing/tricking users who wanted to leave after massive security breaches.

* We invested in our homepage and key verticals – news, sports, finance, and lifestyles – with each remaining as the go-to destinations in their categories. And, they have found new followings on mobile through the Yahoo app, Yahoo Finance, Yahoo Sports, and Yahoo Fantasy. It’s hard to believe, but, in 2012, we didn’t have any of these 4 now-cornerstone apps on iOS or Android, we weren’t developing native apps, and we didn’t use these sought-after brands outside of desktop. Today, our users collectively spend an equivalent of 1,400 years on these products EVERY day.

Translation: We avoided losing some key properties that people used think were worth a lot before Google came along. Plus fantasy football!! We found a way to say many millions people use or sites daily, which sounds ever more impressive to people who are bad at math.

* We bolstered our security defenses with cross-company initiatives like SSL, HTML5, Account Key, and HTTPS

Translation: We started improving security, mostly after some of the largest and most publicized security breaches in history.

* We committed to and invested in technical excellence in our architectures, reducing user-impacting incidents by more than half over the past 5 years

Translation: we fixed a lot of bugs in our products.

* We won 2 Apple Design Awards in 2013 and 2014, and put unified product design front and center with Fuji

Translation: A company who beat our pants by almost every measure in the marketplace, said we made 2 good things, which are not worth specifically naming... the important thing is that Apple liked them, even though they apparently killed off the Apple Design Awards after commoditizing "flat design".

They just announced some 2017 ones recently.

https://developer.apple.com/design/awards/

Of course the point stands. Shareholders don't exactly care whether you win design awards unless it brings in cash money.

Mayer came in and played catch-up and succeeded.

She mentioned a few purchases in the list. Not mentioning most did nothing and Tumblr specifically cost $1B and has had the majority of it written off by Yahoo. But the purchase of Brightroll and possibly Flurry were good ones.

Wat. HTML5 is a security measure now?

https://motherboard.vice.com/en_us/article/yahoo-government-...

Didn't shareholders get stock options as part of their package?

All I ever heard was how those were the only thing of value they had (and berating them for selling half of them back whenever that was).

How would you measure a CEO's performance of a public company if not share price?

Stock price is most certainly not the only dimension by which to measure CEO performance. In fact relying solely on that metric is exactly what fosters our current culture of absurd CEO compensation packages.

Both "Operational Impact" and "Leadership effectiveness" are equally important considerations[1].

Quoting from the source:

"Operational impact. Operational impact refers to the CEO’s influence on the company’s effectiveness in operational areas, such as customer satisfaction, new product introduction, or productivity enhancement, and how well the firm implements its strategy. Operational impact measures often give a better indication of a company’s underlying potential to create value because they are directly related to the immediate stock price, which is subject to market-wide volatility. While still subject to external and internal forces outside of the CEO’s immediate control, this type of performance is more closely related to the CEO’s actions.

Leadership effectiveness. Leadership effectiveness addresses how well the CEO carries out his or her responsibilities, both in terms of executing specific role responsibilities—identifying a successor, meeting with key customers and investors, developing a long-term strategy—and the quality of those actions—communicating with external stakeholders, energizing the organization, and gaining the confidence of investors.Rivero and Nadler (2003)."

Source:

[1] https://saylordotorg.github.io/text_corporate-governance/s10...

Even with those out of the way, it undermines the contribution of other employees, like CTO, CFO, the VPs, etc. Unless the CEO was the one who contributed to their recruitment.

If that were true then Amazon is doing terribly under Bezos.

Profits over time is an incomplete metric for measuring company success because CEOs can decide to invest it all back into capex.

This is not limited to physical assets, if you do R&D and produce a valuable drug patent then you don't need to pay taxes on that value yet, but actual value was created.

Stock is at best a proxy for what you actually care about.

* Profits = Revenue - Expenses

* Assets + Liabilities = Equity

New asset purchases are expenses and not profits. Equity (total market cap) is an estimate of the value of the company, including assets and outstanding liabilities.

This is also why asset depreciation is considered an expense. https://en.wikipedia.org/wiki/Depreciation However, it may also be recorded as income with the initial purchase being considered an expense.

PS: There are an insane number of useful ways to run your personal books, and a few legally required methods in various situations. But, IMO your goal should be match the underlying economic situation of your enterprise not simply move numbers around based on an abstract formula.

Basically, companies are never actually identical so optimal moves for every company is going to be slightly different and this will compound over time. However, if each company is making the same moves then and getting the same results then none of them are making optimal choices.

Consider defense contractors may all be in the same market, but they have different contracts. Farms on the other hand are selling a commodity and are often mostly just at the whims of market forces.

Wow... um, how about profit, it is a business after all. Business isn't about the share price.

And there's what wrong with the world in one short sentence. The market was supposed to be about raising capital so companies could go out and earn profits, the company shouldn't worry or care about its share price in the secondary market, it should be taking the capital and making good business decisions that lead to making profits. Letting the share price be the metric that decisions are made on is letting the tail wag the dog and leads to short term quarterly thinking and bad decisions all around; it's not how a good company is run. Profits lead to good companies which lead to good share prices, you aim for profits and good share prices are the result, not the other way around.

Some companies controlled by a small number of investors (typically founders) may have other more socially constructive priorities, but I think in even many of those cases, it's lip service, and the real reason those things are priorities at all are because it's 'good business' (it will be better off for the shareholders financially).

But "the company" is literally owned by people who buy & sell portions of it in the second market. There are only two reasons to buy shares of a company: dividends and price gains. Owners of company first and foremost want their investment to appreciate not depreciate, ergo company cares about share price first and foremost.

Janitors at Yahoo also presided over a 33B growth in capitalization.

> Janitors at Yahoo also presided over a 33B growth in capitalization.

So then who's responsible for making the changes at a company that result in investors paying more for a piece of the company? Investors are willing to pay more for companies with cleaner toilets?

You're expressing a very naive view on the subject.

If Marissa Meyer orders everyone to work from home, then that can be attributed to her. She can take credit for that. It was her action. But if the stock price goes up $5 today, there's no way to show it was a result of ordering everyone to work from home. If you want to make the argument that Meyers actions led to 33b in market cap growth then make that argument. What did Meyer personally do that caused the growth in market cap, and how?

Consider: the CEO of Ford decides Ford will no longer sell petrol based cars (getting the board to go along with it too) and then executes that strategy.

If it succeeds then the market cap of Ford will increase. If it fails then it will decrease.

On the flip side, no matter how clean a janitor can make the facilities, he can't dictate corporate strategy and Wall Street doesn't care how clean Ford's bathrooms are.

This doesn't diminish the importance of a good janitor, but let's be honest about the limits of their impact.

"Yahoo stock was up by 8.5% at the time of writing." http://www.businessinsider.com/yahoo-verizon-sale-approved-2...