Third Point Sold 11M Shares Of Yahoo, Shares Hit Loeb’s Target


Third Point, the hedge fund headed by activist investor, Dan Loeb, sold more than 11 million shares of Yahoo! Inc. (NASDAQ:YHOO). The hedge fund said its decision was part of its objective to maintain a roughly consistent percentage position of outstanding shares in the company, as it pursues its $5 billion shares repurchase program.

Based on its filing with the Securities and Exchange Commission (SEC), Third Point sold 7,500,000 shares of Yahoo! Inc. (NASDAQ:YHOO) on January 31. The hedge fund reduced its stake in the company by an additional 3,500, 400 shares on February1.  It’s total holding in the company is currently 62 million shares, down from 73,000,400 shares during the third quarter of last year.

Third Point is one of the largest stakeholders of Yahoo! Inc. (NASDAQ:YHOO). During the fourth quarter, the company repurchased the company’s stock worth $1.5 billion, 30 percent higher than the total amount of shares it bought back over the past 12 months.

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The shares of Yahoo! increased by 30%, since Marissa Mayer took over as chief executive officer. During the fourth quarter, the tech giant posted revenue growth for the first time in four years. The company’s GAAP revenue was $1.35 billion, up 2 percent from the same period in 2011. Its adjusted EBITDA was $509 million, 8 percent higher than its EBITDA, while its GAAP net earnings per diluted share were $0.23. Yahoo said, its GAAP net earnings for the full year 2012 was $3.95 billion, including a net gain of $2.75 billion related to the sale of it’s Alibaba shares.

Last year, Loeb emphasized, in his letter to investors, that he invested in Yahoo! Inc. (NASDAQ:YHOO) because of significant discount to intrinsic value. He also pointed out that the tech giant’s hidden jewel was is it’s Asian asset portfolio, which included its stake in Alibaba Group, a dominant e-commerce platform in China and Japan. Back then, Loeb estimated that both asian Assets represents 73 percent of $11 per share of the company’s value with an additional $2 per share of net cash. The stock price of Yahoo! was trading around ~$14.49 per share as of March 12, 2012. According to him, the core business of Yahoo accounted only a modest portion ($2 per share) of the company’s actual value. Loeb estimated that the total valuation of Yahoo! should be around $19.68 per share.

The stock price of Yahoo! is currently trading around $19.76 per share. This could be one of the reasons behind Loeb’s decision to sell a substantial amount of Third Point’s shares in the company.

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