Hello Microsoft, It’s me…Yahoo

I haven’t seen a pounding like this since I found my Dad’s Hustler stash.

In case you haven’t noticed, or don’t care, Yahoo’s stock has been beaten mercilessly on the weekend news that Microsoft told them to “buh-bye.” Not surprisingly, Google’s position went up by 2%.

Not sure where Yahoo will end today, but if you have student loan money still sitting around – short it baby, short it!

These “shorts” make money when the price of the stock they are shorting goes down. For example, I own 10 shares of company ABC at $50 per share. You believe the stock price of ABC is grossly overvalued and is going to crash sometime soon. You are so convinced that the stock will crash, you come to me, and ask to borrow my ten shares of ABC and sell them at the current market price for $50. I agree to lend you my shares as long as you pay me back ten shares of ABC at some point in the future. You take the ten borrowed shares, sell them for $500 and pocket the money (10 shares x $50 per share = $500).

The following week, the price of ABC stock falls to $20 per share. You call your broker (or go onto E-Trade) and tell him to buy 10 shares of ABC stock, at the new price of $20 per share. You pay him the $200 (10 shares x $20 per share = $200). A few days later, you pick up the shares of ABC and bring them by my office. “Here are the ten shares I borrowed,” you say as you put them on my desk.

Do you see what happened? You borrowed my shares of ABC, sold them for $500. The following week, when ABC fell to $20 per share, you repurchased those ten shares for $200 and gave them back to me. In the mean time, you pocketed the difference of $300.

Either way, Yahoo is screwed for the next 6 hours – hit that!