Board Hints Yahoo May be Up for Sale!
Who cares how Yahoo’s business performed in its fourth quarter?
The main point: It’s officially for sale.
Said Yahoo chairman Maynard Webb: “The Board also believes that exploring additional strategic alternatives, in parallel to the execution of the management plan, is in the best interest of our shareholders. Separating our Alibaba stake from our operating business continues to be a primary focus, and our most direct path to value maximization. In addition to continuing work on the reverse spin, which we’ve discussed previously, we will engage on qualified strategic proposals.”
This is stating the very obvious. Strategic alternatives is code for: Come on down, Verizon! Hey there, AT&T! All private equity guys welcome here!
Meanwhile, over on another planet, CEO Marissa Mayer said that Yahoo was going to keep trying to turn itself around.
“Today, we’re announcing a strategic plan that we strongly believe will enable us to accelerate Yahoo’s transformation,” said Mayer. “This is a strong plan calling for bold shifts in products and in resources.”
She outlined cost cuts of $400 million, $1 billion of asset sales and other promises to do better. The turnaround of the turnaround.
These were clearly competing directions at the very top of Yahoo, which is what our sources have said is going on. Mayer wants to fix things at the Silicon Valley Internet giant and an increasing number of board members want to sell it, as Re/code reported earlier today.
“They are emotionally supportive of Mayer and her desire to keep at it, but some of the board just wants to get the company sold for as much money as possible,” said one person close to the situation about the directors. “They’ve had enough.”
In other words, Marissa is from Mars and Maynard is from Venus.
As to earnings, Yahoo met expectations, which were low.
Various analyst estimates had expected the Silicon Valley Internet giant to deliver revenue of $1.2 billion, a flat performance with lowered earnings of 13 cents. It basically hit that, doing a little better ($1.25 billion a year ago in the same period and $1.27 billion this year). By the way, Yahoo earned 30 cents a share in the same period a year ago.
Yahoo shares have declined 34 percent over the last year, down 12 percent in 2016. The stock was still down in after-hours trading by close to 2 percent. That has irked investors like Starboard Value, which has pushed for a sale of the core assets.