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Is Vladimir Putin’s Referendum Victory Good for Yandex Stock?


Jul. 24 2020, Updated 1:09 p.m. ET

Yandex stock rose 1.27% on July 2. Voting results showed a landslide victory for President Vladimir Putin in Russia’s constitutional referendum.

The constitutional changes that Russians passed in the referendum vote are broad. However, the key highlight is that the constitutional amendment paves the way for Vladimir Putin to stay in power until 2036.

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Yandex was founded in 2000—the same year Putin won his first presidential term. The company went public in May 2011—a transaction that priced Yandex stock at $25 per share. Notably, Yandex stock’s IPO price of $25 was higher than the target range of $20- $22. Therefore, the transaction raised $1.3 billion, which was more than was expected.

At $50 per share currently, the stock has doubled from its IPO price.

Yandex is Russia’s technology champion and Vladimir Putin’s pride. In the technology space, Russia has Yandex, the US has Google and Amazon, and China has Baidu.

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Investors pile into the stock this year

Yandex is one of the technology stocks that’s in hot demand amid the COVID-19 pandemic. So far this year, the stock has risen 15%. The company’s biggest gain has been over the past few months. Notably, Yandex stock has gained more than 50% over the past three months.

In comparison, Google parent Alphabet stock has gained 30% in the past three months. Baidu and Facebook stocks have gained 24% and 48% during this period, respectively.

Yandex’s business includes a search engine service, ride-hailing, and cloud computing. Yandex is the second-largest search engine service in Russia with a 44% market share. Google leads with 54% market share. With the search engine being the largest business, Yandex derives most of its revenue from advertising. 

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The company’s advertising sales rose 11% YoY (year-over-year) in the first quarter, which lifted the overall revenue by 26% YoY to $604.7 million. The stock has gained 35% since it released its first-quarter results on April 28. 

Yandex wants to buy out Uber

Yandex.Taxi is a ride-hailing business that Yandex has in partnership with Uber Technologies . Yandex owns 61% of Yandex.Taxi, while Uber controls 38%. However, the company wants to buy out Uber from Yandex.Taxi to have full control of the business.

Moreover, Yandex is engaged in developing self-driving vehicles, a program that could boost the stock more. The company already provides rides services in driverless cars.


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