After the Yahoo hacking scandal was made public a few weeks ago, there were rumors that Verizon would be looking to go back on their purchase of the web services side of the company. Although this was almost certainly seriously considered by Verizon, they are not going to be pursuing this avenue, new reports say. According to Verizon CEO Lowell McAdam, the purchase of Yahoo is still happening, he confirmed in a press statement on October 10th.
What was confirmed in the same statement is the fact that Verizon is investigating whether or not the hacking of personal data has created any sort of tangible damage to Yahoo’s worth. This has created a lot of speculation that Verizon will be attempting to renegotiate the purchase price of the web services company. The originally agreed upon price was set at $4.8 billion. If the price goes down substantially, then there is a good chance that Verizon’s stock price will increase, especially as the scheduled sale date grows closer.
News, events, and rumors have a large impact on short term asset prices, creating great opportunities for versatile traders. Being able to interpret how these will impact prices is a good way to get ahead of trends and create great profitability scenarios for you. However, being able to put these short term economic events into contrast with the most probable long term prognosis of an asset will help you to create top quality binary options trades, especially when it comes to major corporations like those impacted here. Because there is so much powerful fundamental data available for corporations, it is easier for us to determine long term trends of a company compared to their current state. For example, if we look at company XYZ and see that it is priced at $50 per share, but the company is only worth $20 per share on paper, we can see that it is probably overextended unless something miraculous were to occur with its growth.
Applying this concept to a real company like Verizon isn’t quite as simplistic, but the premise remains the same. By looking at their fundamentals and seeing how a short term fluctuation impacts them, we can position ourselves for short term and limited trades, making binary trading ideal for speculating on news and events like what we see here.
Yahoo released the news of the hacking earlier in 2016, but the actual breach of security occurred in 2014. They said that stolen data may include email addresses, names, birthdates, phone numbers, and perhaps even encrypted password data. It is the largest ever confirmed data security breach, and has impacted about 500 million people. That’s about 1/15th of the world’s current population.
With major companies like Facebook and Alphabet dominating the world of online advertising, Yahoo has really struggled to be competitive here. Verizon believes that the public craves a third party in this big duo, and with their current resources combined with Yahoo’s, they would be better equipped to provide this service. Verizon already owns AOL, which has long passed by its zenith in the world of online marketing and advertising. However, with much of the uncertainty about the damage done from the security breach, it’s hard to tell whether or not this will still give Verizon the footing that they need to be a major player here. This research still needs to be finalized, but if the outlook is favorable, Verizon will likely benefit from being able to get a cheaper price on Yahoo. Traders—particularly binary options traders and those involved in day trading stocks in the traditional sense—need to pay attention to this so that they can know how to approach both of these companies, along with any potential impact that the finalized sale would have on Facebook and Alphabet’s Google.