YHOO - Yahoo! Inc. - Page 37

strong start today with earnings after bell

could be preview of good report and upside suprise...or shorts starting positions in prep for more downside on neg report

This is going to go way up! I am betting.

Yahoo To Return 'Substantially All' Alibaba Proceeds To Shareholders
7 hours 4 minutes ago - Dow Jones News


By Shara Tibken
Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--Yahoo Inc. (YHOO) plans to return substantially all proceeds from its agreement with Alibaba Group Holding Ltd. to shareholders and said the deal value could be higher than the original $7.1 billion estimate.
The deal, struck late Sunday, resolves a tumultuous seven-year relationship between Yahoo and the Chinsese e-commerce company. Yahoo will sell up to half of its 40% stake in Alibaba for $7.1 billion, including $6.3 billion in cash and about $800 million in Alibaba preferred stock. The deal would net Yahoo $4.2 billion after taxes, Chief Financial Officer Tim Morse said Monday during a conference call. The company plans to return "substantially all" of that to shareholders, he said.
The $7.1 billion price stems from a $35 billion valuation for Alibaba based on new equity raised to finance the transaction. However, Morse said there are incentives in place to encourage a higher valuation. If Alibaba is valued at $40 billion, Yahoo will still receive $7.1 billion, but Yahoo would receive $7.6 billion for a $45 billion value or $8.1 billion for a $50 billion value.
"The valuation of this initial repurchase, we want to keep re-emphasizing that it's TBD," Morse said. "We have a floor, but we have an incentive structure to drive as high as possible above that floor."
Yahoo shares, down 5% over the past 12 months, slipped about 1% to $15.31 in recent trading.
For years, Wall Street analysts have said that much of the value of Yahoo's stock comes from its ownership stakes in Alibaba and Yahoo Japan, creating valuation and turnaround challenges for management. At the same time, some Yahoo investors have worried that selling the Asian assets entirely would cut off any potential gains Yahoo would get from an expected public offering of Alibaba.
With the current deal, Yahoo simplifies its business, bolsters its share value through the buyback, and still gives investors the opportunity to participate in Alibaba's growth.
Morse on Monday said Yahoo will return "substantially all" of its cash proceeds to shareholders, though the company hasn't yet determined the form or timing for such action. Yahoo already said it increased its share buyback plan by $5 billion as part of the transaction.
Stifel Nicolaus analyst Jordan Rohan said the agreement does have some drawbacks, such as not being tax efficient, but the share repurchase is "massive enough" that Yahoo shareholders should benefit "meaningfully" in the short term. And a path to an IPO for Alibaba could drive additional upside in the longer term.
Alibaba, meanwhile, is expected to fund the deal through a combination of cash on hand, new and existing debt facilities, a new equity raise and the issuance of a new class of preferred stock to Yahoo. If Alibaba repurchases less than 15 points of Yahoo's stake, the level of preferred stock given to Yahoo would be reduced to zero, Morse said. And Alibaba can choose to pay cash instead of issuing preferred shares, he said.
Alibaba will issue at least $2 billion in equity to nonaffiliated third parties, Morse said. And Alibaba must pay a higher price to Yahoo if it raises $500 million or more in equity within a designated period of time post-close, he said.
Of the remaining 20% stake owned by Yahoo, Alibaba would have the right to buy as much as 10% from Yahoo at the share price of a potential public offering of the Chinese Internet giant, or allow Yahoo to sell those shares in an IPO. Although Alibaba doesn't have current plans to go public, the right to buy back the additional 10% expires in December 2015, providing an incentive to list before then.
Morse said Yahoo will have input and influence on the selection of underwriters for an IPO.
Yahoo can choose to hold on to the last 10% of its stake or sell it to Alibaba at the market price of Alibaba after it becomes a publicly traded company, the companies said.
Morse on Monday said there are no requirements in place for when Yahoo would have to sell the shares on the public market, allowing it to choose a time that's most beneficial to Yahoo.
Yahoo paid $1 billion for its 40% stake in Alibaba in 2005, when the Chinese company was a fledgling

some swings to play if you can get in and out right

Marissa Mayer Named as Yahoo CEO Mayer to Resign from Google Today, Start at Yahoo Tomorrow O and President

 

wtf, seriously!? She's one of Google's main people... that is crazy, now she's the enemy

big move and huge deal for YHOO...up big already AH

Yeah reading the news... pretty big step up for her. Find it surprising because she was a big public (pretty) face for Google. It's definitely ambitious, curious to see how this works out going up against her former employer, looks like a monumental tasks, so far the previous two CEO's failed.

Yahoo still sucks. 

 

That is all I have to say about that. 

Very bad move for yahoo

let the idiots buy

Ill go in short

 

I disagree. Best move they've made in years. They need to shake things up and get some positive PR. This does both. Now they need to do a lot more right in order to get back into competition with the big boys.

indeed...win win for them...one of the big steps they needed to take ...now on to the next one...but a good start for sure

getting too emotional...gotta now how and when to trade minus your feelings

i may look this week and see if there is a swing play showing itself ...who knows...not jumping in rt now tho but looking

u guys are crazy

she has 0 experiences as a ceo

and has been placed on a sinking ship...women in silcon valley have all struggled  look at HP...

 

she will not even be part of the group for another year and is obligated to not recruit any google employees..they have nothing going for them but selling of assests..which means its ready to sicks even more

 

i say let it rise..the puts get cheaper and cheaper

 

wont last...

 

i think earnings is even a miss and are using this to put out the fire...

 

will be in penny stocks in several years

not a very smart perspective to say the least ....simply a very good move for YHOO...what else they supposed to do ???

took some top brass from #1 ... thats the best thing you can do when you are #2 3 or 4 etc

not saying its a cure all...but def a good start and a step in the right direction....may present a trade opp...we'll see how it pans out thats all

a believer steps up ...
dan loeb buys 2.5m shares

Totally forgot to roll my calls forward on this one