Jefferies & Co. Just Downgraded Yahoo

Scott ThompsonScott Thompson

Photo: petrushansen

Investment banking group Jefferies & Co. has downgraded Yahoo, reports Forbes.Yahoo shares fell 3.1% yesterday when the company announced a new CEO instead of someone to buy the company outright.

The man tagged for the job, Scott Thompson, formerly of PayPal, is a counterintuitive choice for CEO as he has no experience in media, advertising, or content, which are the venues where Yahoo makes all its money.

Jefferies analyst Youssef Squali indicates that he cut the rating for two big reasons — bringing in a tech-oriented CEO to jumpstart the company will be a “long, costly, and risky endeavour,” and Thompson’s “lack of media/turnaround expertise are negatives.”

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