Yahoo board of directors will sit in a final meeting to discuss about all of the options and the company's future.
The next few days and weeks are very crucial for Yahoo! Inc., as the board of directors and executives will be deciding the future in the next few meetings. The internet company was once known as one of the most prominent companies of the Silicon Valley however now it is listed as one of the most troubled organizations in the industry. Reuters reported that all thinking and decisions might be done and dusted by Friday, as it will be the third and final meeting day regarding Yahoo’s future.
The meeting panel consists of nine board members of Yahoo that are thinking over the future of the business. One option that the board is thinking of is the same that analysts suggested Yahoo a few days ago, which is to sell its core business. It does not only include its core advertising business but also includes Yahoo Mail, sports websites, and advertising technology. The board also has to decide whether it plans to keep it stakes in the Chinese tech giant, Alibaba Group Holding, or sell all of them.
Robert Peck, who is one of the most reliable and trusted analysts at Sun Trust, suggested the board to hold off on any decision before finalizing due to the complexity of various options. He added, “While many investors may simply apply a mid-single-digit EBITDA multiple to value the core, we believe the value is more intricate.”
On the other hand, Re/Code reported a few days back that Yahoo’s board finished all of its meetings without any final decision on Alibaba stakes, whether to keep or sell. It further added that the final decision regarding the stakes and spinoff would come by the end of this week.
Reuters stated, “In January, Chief Executive Officer Marissa Mayer announced the plan to spin off the Alibaba stake into an independent business. Yahoo said the deal would be tax-free, but the U.S. Internal Revenue Service has declined to verify that. Taxes related to the spinoff could leave Yahoo shareholders on the hook for $12 billion.”
This was the reason that an activist investor, Starboard Value, requested the company to sell off its core businesses instead of selling stakes in Alibaba. This move has a lot of obstacles and in the end. The internet company will have to pay heavy taxes in order to get rid of Alibaba stakes. The Chinese tech giant was said to be one buyer of Yahoo’s core business along with various private equity, Internet, and media firms.
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