Comment on Yahoo to transfer Alibaba shares into spin-off firm

Yahoo to transfer Alibaba shares into spin-off firm

Facing mounting pressure from investors, Yahoo CEO Marissa Mayer said Tuesday she will transfer its remaining 384 million shares of Chinese tech giant Alibaba into a separate, publicly traded company. “Throughout my tenure at the company, we have worked tirelessly on a tax-efficient alternative that would maximize the value of our Alibaba investment for our shareholders,” Mayer said. Starboard said in a letter that if Yahoo didn’t follow its suggestions, “such actions would be a clear indication to us that significant leadership change is required at Yahoo.” Investors will receive shares in the spin-off, which will operate a legacy, ancillary Yahoo business. In her presentation to investors Tuesday, Mayer said that after the Alibaba shares move into the spin-off company, Yahoo will have returned nearly $50 billion in value to shareholders since the second quarter of 2012. Under Mayer’s leadership, Yahoo has invested heavily in these categories, acquiring mobile and ad-related companies and reallocating staff. “The overall top line and bottom line is pretty dire if you look at the details,” said Rob Enderle with advisory services firm Enderle Group. “There will be continued pressure for her to step down and pressure for AOL and Yahoo to merge,” he said.

 

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