Yahoo Won’t Do The Spin Afterall

Yahoo Won’t Do The Spin Afterall
Yahoo!: Intrinsic Valuation from September 2014

Yahoo is backtracking, now deciding not to spin off its stake in Alibaba (BABA). Rather, the focus is now on getting the core business sold. Or possibly spin off the core business.

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Months of work and lawyers’ fees are a waste. But now it’s back to trying to unlock the value of its online sites — i.e. Yahoo Finance, sports and email — which it’s tried doing for the last three years under Marissa Mayer.

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But there is, at least, a bright spot, where Verizon (VZ) might have some interest. Verizon bought AOL (AOL) and there was a push earlier this year by activist investor Starboard Value to merge AOL and Yahoo. Tim Armstrong could have free reign to turnaround Yahoo.

On Verizon’s interest and what to do with Yahoo Japan:

Verizon CEO Lowell McAdam, speaking at the Business Insider IGNITION conference earlier on Tuesday, said that the telecommunications company would consider buying all or parts of Yahoo if it were to be put on the auction block.

CNBC’s David Faber said on the air that Yahoo would also likely seek to include its stake in Yahoo Japan, a joint venture with Softbank, as well as the more than $5 billion in cash on Yahoo’s balance sheet, in a spinoff of its core internet properties. Faber said a decision to spin off the core business has not been made yet, but that the board has decided to explore what would in effect be a reverse spin of Yahoo’s business.

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