Yahoo! is in tough shape at the moment after having lost over 30% of their share price since January 2015 where it was trading at just over $50, currently it is trading at around $36.90 after midday.
The market value of Yahoo!, around $33 billion, is attributed to their 15% holding of giant Chinese Internet company, Alibaba, and 35% holding of Yahoo! Japan leaving their core business valued at pretty much zero. However despite this, Yahoo! future may not be as bad as a lot of analysts think.
Since Marissa Mayer, CEO of Yahoo!, has done a flip-flop on her promise to spin off the Alibaba holding to unlock value for shareholders in the fourth quarter of 2015 a new opportunity has arisen. There are talks of selling Yahoo!’s core business and a lot of potential buyers might be interested including AT&T, Comcast, CBS and Disney. The most serious would be Verizon, whose CFO has publicly said “We’ll look at” buying Yahoo!
And when you look at the Yahoo!’s numbers, they are not all that bad. Yahoo! is the third most popular site behind Google and Facebook, makes money and sitting on some cash pile.
If our thinking is correct now that Marissa Mayer’s Alibaba blunder is out of the way she has to redeem herself as CEO.
While activist hedge fund, Starboard Value LP, has her dancing to their tune, the only way to appease shareholders now is to try to make a quick deal and sale of Yahoo!’s core business to interested buyers. We smell a potential deal soon?
We love to hear from you and what you think, take the poll and add your comments.
Will Yahoo! sell its core business soon?