Without tax-free status the spinoff could generate a hefty tax bill for shareholders.
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Yahoo released a statement today that said: “The Board will now evaluate alternative transaction structures to separate the Alibaba stake, focusing specifically on a reverse of the previously announced spin transaction”. She is not the first CEO seeking to reinvent Yahoo, but she had initially inspired confidence with her experience as a manager at rival Google.
Twelve months later, Yahoo still plans to split off its Alibaba shares, but in a different way.
Mayer said via her blog that she planned to take limited time away and work throughout her pregnancy, similar to the approach she took when her son was born three years ago.
Yahoo’s new spinoff plan could be even more complicated than the original Aabaco spinoff.
In the event of a spin off, May sees Yahoo’s fair value at $40 and values the company at $45 in the event of a sale.
Yahoo says it will spin off its remaining stake in Alibaba in a move that wards off a potential shareholder rebellion. Analysts believe Yahoo’s websites, mobile applications, ad services and well-known brand eventually could be worth $3 billion to $5 billion. “The problem is that spinning out the core assets is much more complicated, which condemns investors to another year of waiting to realize the value that obviously does exist inside this company”. The best path forward, Webb said, involves “separating the Alibaba assets from our operating businesses and also turning around the performance in our operating business”. In a note to clients, he reiterated a “Buy” option on Yahoo stock with a 12-month target of US$38. The shares have fallen by 32 per cent so far this year.
Mayer’s big news received a number of congratulatory comments, including several from tech executives like Google CEO Sundar Pichai and Microsoft CEO Satya Nadella. The board expects that it will take a year or more for this spinoff to conclude.
Yahoo also announced that Max Levchin, co-founder of PayPal Holdings Inc, was resigning from the board because of the demands on his time, “not due to any disagreement with Yahoo on any matter related to Yahoo’s operations, policies or practices”.
“Our whole family is doing great!” she said.
A Yahoo spokeswoman declined to reveal the twins’ names or weights.
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The foundation for all these reports hinged upon a hypothetical: If Yahoo sold itself to a new owner, it may want a new person at the helm, so maybe it will fire Mayer or she will resign. “Yahoo is just a company in trouble”.
