The Yahoo board has a series of meetings from Wednesday to Friday in which it is discussing options over how to move forward on its lucrative stake in Chinese e-commerce firm Alibaba Group.
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Yahoo’s board may be considering selling its core search and display advertising businesses after an activist investor demanded that the company explore doing so last month, according to reports.
The Wall Street Journal adds that the Yahoo’s board are under increased pressure due to the lack of progress in turning around the company from CEO Marissa Mayer’s plans, which is in its fourth year, and the exodus of top executives.
The Wall Street Journal first reported that Yahoo might sell its internet business. Starboard attributes the relatively low price of the Internet business to poor management of the division by Mayer and the Yahoo management team.
Last year, Yahoo announced plans to sell its 384 million shares in Alibaba that it acquired in 2005.
Yahoo was down almost 2% in midday trading in the stock market today.
On Wednesday, December 2nd, the WSJ is reporting that Japan’s SoftBank, the owner of Sprint Corp. and other telecommunications and digital businesses, is a potential bidder for all or part of Yahoo, as the US internet titan has seen limited growth in its Internet operations. In a letter to Yahoo, Starboard said its position changed following the federal government’s decision not to rule on whether the Alibaba spinoff would incur billions of dollars in taxes. The source also suggested that the company is also uninterested in acquiring Yahoo’s 35 percent stake in Yahoo Japan, which is valued at around $8.5 billion.
There has been no comment from Yahoo regarding this report and it’s unlikely to say anything throughout the week if these meetings really are taking place, perhaps more details will leak out later in the week.
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The call by hedge fund Starboard Value came with Yahoo on track to set up a new corporate entity holding the Alibaba stake in coming months that would be spun off. She has made efforts to reshape the company for the mobile era as more users shift to tablets and smartphones from PCs. Also, the company issued a light guidance once again; for its fourth quarter of fiscal 2015 (4QFY15), the management expects revenue to fall within a $1.16-1.20 billion range, well below the consensus estimate of $1.33 billion.
