Evaluating Yet Another Yahoo!-Alibaba Deal … Rumor or Report?
Yahoo.comYahoo! Inc. (NASDAQ: YHOO) is trading higher this morningĀ on rumors and reports that the company and Alibaba are finally close to a deal that would allow Alibaba to repurchase a 20% stake from Yahoo! AllThingsD.com has put the reported price…
Yahoo! Inc. (NASDAQ: YHOO) is trading higher this morningĀ on rumors and reports that the company and Alibaba are finally close to a deal that would allow Alibaba to repurchase a 20% stake from Yahoo! AllThingsD.com has put the reported price as being $7.6 billion, but this remains an unconfirmed price and an unconfirmed sale. While this is good on the surface, there is a reason that the reaction is muted. Maybe more than one reason.
Yahoo! remains a troubled company and the turnaround is still in its infancy, as no new CEO has yet managed to fix this shipās direction. Now Marissa Mayer is in charge and the focus is to go back to content and products, so far.
Investors may want to consider that Mayer also was reportedly reconsidering whether Yahoo! would automatically distribute its gains to shareholders as well, as part of her turnaround strategy. That may mute at least some of the news because the company does not reward shareholders with a dividend.
Another reason that the reaction may be muted is that there is a āSure, weāve heard this beforeā attitude from the investment community.
Yahoo! shares are up but only by 0.9% at $15.30 in the premarket session, versus a 52-week trading range of $13.11 to $16.79.
AllThingsD did report that investors will get some back too in its report.
JON C. OGG
Contact [email protected] for any questions or corrections.
Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.
