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1 Way the Tumblr Deal Could Push Yahoo! Stock to New Highs

When Marissa Mayer announced to the world that Yahoo! (NASDAQ: YHOO  ) had acquired Tumblr for $1.1 billion in cash, she promised to not "screw it up." What she means by that isn't entirely clear, but there's plenty at stake for investors -- even if you wouldn't know it from Monday's meager Yahoo! stock action.

Unlike Facebook's coolly received Home suite of apps, which was aimed at improving engagement with mobile users, more than half of Tumblr's members use the mobile app, averaging 7 sessions per day. All told, Tumblr attracts 900 posts per second and 24 billion minutes of viewing time each month, says Tim Beyers of Motley Fool Rule Breakers and Motley Fool Supernova in the following video.

With this deal, Yahoo! adds a powerful weapon in its war with Facebook and Google for big-ticket brand advertising dollars on mobile devices. Mayer all but said she would do something like this months ago. Now that she's followed through, investors can be confident that she'll continue to. Look to buy shares of Yahoo! stock on weakness, Tim says.

Do you agree? Please watch to get Tim's full take, and then let us know whether you would buy, sell, or short Yahoo! stock at current prices.

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9/27/2016 4:00 PM
YHOO $43.37 Up +1.08 +2.55%
Yahoo CAPS Rating: **