Yahoo Shelves Plans to Spin Off Alibaba Stake

10 Dec 2015 | Author: | No comments yet »

Business Highlights.

There were two large business events that defined a new cycle in the market on Wednesday, and Jim Cramer said it all comes down to squandered opportunities versus created opportunities. “I’m talking about Yahoo’s decision to stand pat and not try to bring out any value, and Dow and DuPont’s decision to give up their storied legacies and become one company in order to create value,” the “Mad Money” host said. NEW YORK–Large shareholders are doubting Yahoo’s commitment to selling its core Web assets, raising the specter of a contest for board seats if investors’ fears are confirmed.

Internet pioneer Yahoo, under pressure from unhappy shareholders and desperate to avoid a huge investment-related tax bill, will break itself apart — just not in the way it had previously planned.SAN FRANCISCO (AP) — Yahoo’s long-running identity crisis is spiraling in a new direction now that the company is abandoning a year’s work on a tax-dodging spinoff to pursue an alternative path that will carve off its Internet business instead.Uncertainty over a planned “reverse spinoff” of core Internet assets and a decision to retain a $31 billion (U.S.) stake in Chinese e-com giant Alibaba Group clipped shares of Yahoo Inc. in Wednesday trading. Amid pressure from activist hedge fund Starboard Value, the online search and media company Wednesday said it will cease controversial plans to spin off its $32 billion stake in e-commerce company Alibaba.

The stock closed down 1.4 per cent after Yahoo unveiled plans to transfer assets other than Alibaba into a newly formed company — a transaction requiring layers of approval that could take a year to execute. SYDNEY (AP) — Australian police on Wednesday raided the home and business premises of a man that technology news sites have claimed is the founder of virtual currency bitcoin. One large shareholder, who asked not to be identified due to firm policy, attributed the stock decline to the board’s failure to commit to a sale of core assets, even if it means taking a tax hit — as well as a lack of confidence in Mayer’s ability to turn the business around.

A statement from the Australian Federal Police said the searches were related to a tax investigation and not recent media reports on the virtual currency, which is used for transactions across borders without third parties such as banks. Yahoo.com, which still ranks fifth in terms of daily visits, could be an attractive target for a telecom, media or private equity buyer and U.S. carrier Verizon on Monday said it would consider an acquisition. If Yahoo can’t drum up support for its latest plan, the board — already under fire for a falling stock and shrinking market share — could be at risk for a proxy contest, experts said. Yahoo has downgraded revenue growth projections amid competition from Alphabet Inc’s Google and Facebook but the Yahoo board said it continues to support Mayers’ leadership and has no plan to sell the company in whole or in part. FILE – In this Jan. 7, 2014, file photo, Yahoo president and CEO Marissa Mayer speaks during the International Consumer Electronics Show in Las Vegas.

The person, or people, behind the digital currency’s inception have been known only as “Satoshi Nakamoto,” which many observers believed to be a pseudonym. DOVER, Del. (AP) — Shares of Dow Chemical and DuPont were trading sharply higher Wednesday amid reports that the two chemical giants are in advanced merger discussions. Mayer is expected to update Yahoo’s growth strategy when the company reports fourth-quarter results next month and analysts say the plan could include a jettisoning of underperforming business units. The Wall Street Journal reported Tuesday that the companies were planning to merge and then split into three companies focused on agriculture, specialty chemicals and materials.

It also may raise more doubts about whether Mayer will be able to turn around Yahoo, even though company Chairman Maynard Webb said Wednesday that the board of directors remains in her corner after three-and-half years on the job. The two companies, both with strong positions in the agriculture sector, declined to comment on media reports of a possible merger and an official announcement was possible as early as Thursday.

We remain focused on our operating business being turned around and separately out the Alibaba assets,” through a reverse spin-off that would leave Alibaba asset where they are and spin off everything else, forming two publicly traded companies. Citigroup analyst Mark May downgraded Yahoo’s stock Wednesday on the complexity and timeline of the plan. “Given the lack of a near-term catalyst and the risk to the execution of such a deal, we downgrade [the] shares,” May said in his research report.

With Yahoo hanging in limbo, prospective bidders could emerge for the company’s Internet operations, which Wall Street has been valuing at next to nothing. WASHINGTON (AP) — The majority of U.S. renters are now older than 40, a fundamental shift over the past decade that reflects the lasting damage of the housing crash and an aging population. Investors will be looking for a sign from management at its fourth-quarter earnings announcement in January, said Stephen Diamond, a professor at Santa Clara University’s School of Law. “There remains lingering doubt about the board’s inability to execute what they say they are going to do,” Diamond said. This finding in a report released Wednesday by Harvard University’s Joint Center for Housing Studies overturns the assumption that the rental boom is only the result of twenty-somethings flocking to hip urban centers. Suitors might include AT&T Inc., Verizon Communications, Comcast Corp., IAC/InterActiveCorp and private equity firms that specialize in buying troubled companies.

Webb, though, emphasized there are no plans to sell Yahoo’s Internet business, which he called “tremendously undervalued” in a Wednesday conference call. Minister of Finance Win Shein said the Yangon Stock Exchange will initially be open only to Myanmar companies and investors, but planned law changes will eventually allow foreigners to invest in Myanmar shares.

This person also expects some bidders will wait until after Yahoo releases its fourth quarter earnings to make a bid because it will be cheaper to buy if Yahoo misses earnings projections. The exchange was set up by local companies in a joint venture with Daiwa Institute of Research Japan and Japan Exchange Group, which operates the Tokyo Stock Exchange. DALLAS (AP) — American Airlines says it will start selling “premium economy” service on international flights, with leather seats, entertainment systems and meals.

Verizon CEO Lowell McAdams, which bought Yahoo competitor AOL earlier this year, said at a Business Insider conference that the telecom giant would look at Yahoo if it were up for sale. “So what if you have the spin-off and have a decision [about a sale] in a year?” said Josh Strauss of Appleseed Fund, which is invested in Yahoo. “It’s not the end the world,” he said. The company disclosed Wednesday that Paypal co-founder Max Levchin, a director recruited by Mayer, is resigning from the board to concentrate on running his latest financial services startup. Even so, Yahoo’s net revenue declined by 8 percent from the prior year in the third quarter and an even steeper decline is forecast for the current quarter ending in December. SANTIAGO, Chile (AP) — Douglas Tompkins, the co-founder of The North Face and Esprit clothing companies who bought up large swaths of land in South America’s Patagonia region to keep them pristine, has died from severe hypothermia in a kayaking accident in Chile.

The Aysen health service said the wealthy businessman and lifelong outdoorsman was boating with five other foreigners on Tuesday when their kayaks capsized in a lake in near freezing waters in the Patagonia region of southern Chile. In the backdrop, Yahoo also has had to ward off a hostile takeover bid from Microsoft Corp. and quell shareholder uprisings spearheaded by activist investors Carl Icahn and Daniel Loeb. SEOUL, South Korea (AP) — Samsung Electronics said Wednesday it will set up a team to develop an auto components business focusing on autonomous driving technology and entertainment systems.

The race for the Democratic and Republican party nominations eclipsed an outpouring of emotions over deadly attacks, strife, social issues and disasters. The rankings released Wednesday open a window into the cultural mindset by analyzing how frequently specific high-profile events, politicians, entertainers, athletes, movies and TV shows were mentioned in the posts of Facebook’s 1.5 billion users. In other trading, wholesale gasoline rose 2.8 cents to close at $1.232 a gallon, heating oil fell 2 cents to $1.239 a gallon and natural gas fell 0.8 cent to $2.062 per 1,000 cubic feet.

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