According to CNBC, the Yahoo board plans to meet Wednesday and discuss selling off the company’s core businesses in addition to its Alibaba shares.
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In a letter last month Starboard urged Yahoo to halt plans to sell the $22 billion Alibaba stake due to the risk of a $12 billion tax liability and because the holding along with Yahoo Japan accounts for most of Yahoo’s implied value.
Pivotal Research analyst Brian Wieser values core Yahoo at $1.9 billion, not including the $5.8 billion in cash on its balance sheet.
The boardroom intrigue revolves around a recent proposal from Starboard Value, a NY hedge fund that been pressuring Yahoo CEO Marissa Mayer to take dramatic steps to boost the company’s stock.
In more than three years at the helm, Ms Mayer has made little progress turning around the company, whose revenue is forecast to drop 8% in 2015.
Yahoo was planning to complete the spinoff of its Alibaba stake, now worth more than $30bn, by next month, Ms Mayer said on the firm’s third-quarter conference call in October – later than a previous target of year’s end.
Meanwhile: Will killing Yahoo’s main business save it, my colleague Michelle Quinn asks. This is the online real estate that Yahoo’s display advertising business is built on.
A separate Alibaba stake would be expected to be more highly valued by the market, but investors want to avoid a massive tax bill in the process.
Re/code’s Kara Swisher also tweeted that there is “no process in place” for any sale and that the company has not hired any new bankers, other than Goldman Sachs and JP Morgan, who were hired a year ago to fend off activist investors.
In the eyes of some, Yahoo’s core business is worth “less than nothing”, though that’s open to interpretation. Instead, Starboard said Yahoo should sell its core internet search and ad business.
The company’s advertising-funded internet properties – its search engine, email services and the Yahoo website – as well as Tumblr, the social network it acquired in 2013 and a number of advertising technology companies bought by Ms Mayer, could be acquired by private equity buyers, or possibly Softbank itself.
Yahoo has declined to comment or report on the meetings. The meeting is also believed to cover the future of the company’s current chief executive Marissa Mayer.
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Shares have tumbled as a result, falling by around 30% this year.
