Wall Street Expresses Tepid Enthusiasm on Yahoo! (YHOO) / Tumblr Deal

This morning Yahoo! Inc. (NASDAQ: YHOO) said it would buy Tumblr for $1.1 billion. Wall Street greeted the news with lukewarm enthusiasm. As an example, Bernstein analyst Carlos Kirjner said in an email the deal might be "premature." He isn't alone. Well Fargo analyst Peter Stabler described himself as "cautious" on the deal.

"While we believe some investors may see parallels between Yahoo!/tumblr and Facebook/Instagram, we see distinct differences. In Instagram, Facebook removed what we believe was an existential threat, a fast-growing social network operating in a key FB currency: sharing of photos with friends. Though tumblr has been very successful in establishing itself as an easy-to-use blogging platform embraced by young internet users (a key interest of Yahoo!), we see few obvious synergies with Yahoo!'s core assets," said Stabler.

Yahoo! CEO Marissa Mayer's commented to criticism via twitter, saying bluntly, "We promise not to screw it up."

Shares of Yahoo are poised to open higher by less than 1%.

Wells Fargo has Market Perform rating on Yahoo! with a price target of $24-$25.

For an analyst ratings summary and ratings history on Yahoo! (NASDAQ: YHOO) click here. For more ratings news on Yahoo! click here.

Shares of Yahoo! closed at $26.52 yesterday.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• HSBC Downgrades Feng Tay Enterprises (9910:TT) to Hold
• American International Group (AIG) PT Raised to $89 at Piper Sandler
• London Stock Exchange Group Plc. (LSEG:LN) (LNSTY) PT Raised to GBP88 at HSBC