Bank of America Maintains Buy on Yahoo! After New CEO Announcement

Bank of America has published a research report on Yahoo!

after the company announced that former President of PayPal, Scott Thompson, has accepted the role as CEO of Yahoo!. In the report, Bank of America writes, "Yahoo! announced that Scott Thompson, the former President of PayPal, has accepted the job as CEO of Yahoo! and Time Morse will resume his role as CFO. Despite limited turnaround experience, Mr. Thompson is widely seen as a respectable Internet executive with a strong technology background. As a President of eBay, Mr. Thompson expanded PayPal's user base from 50mn to 104mn active users in 190 countries worldwide and grew PayPal's revenue from $1.8bn to over $4bn. Initial reaction to the news was negative, likely highlighting that the Street is concerned that an asset sale (to Alibaba and Softbank) could be delayed or less likely. We wouldn't expect any financial turnaround for Yahoo's core business until 2013, at the earliest, and 2012 could become an investment year for the core business." Bank of America maintains its Buy rating and $18 price objective on Yahoo!, which is currently trading down $0.38 form yesterday's $16.28 closing price.