Is this a harbinger for darker times to come? Or is it simply Yahoo's time finally? I think there is still value in Yahoo it's just expectations vs market reality to me are at odds. I don't know what I'll set my grandma's homepage to now.
Yahoo to Spin Off Its Core Businesses
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Re: Yahoo to Spin Off Its Core Businesses
#142Can someone explain why do business like to create new company? What are the benefits for the financial return other than having a book reporting individual revenue? In the end, aren't they going to be under the same parent company, which, if one wishes, can actually challenge and even overrule the child company CEO's decision behind the scene? HP, Google, now Yahoo.
They may be going private equity then. PE often does more drastic reorganizations than public companies, not having the burden of shareholders and boards. The danger of PE is that sometimes they just use companies as a vehicle to create large debt and convert it into dividends. The remaining company is too broke to continue then.
Re: Yahoo to Spin Off Its Core Businesses
#143Any reason I shouldn't see this as a complicated tax dodge? Simply more multinational pilfering from public coffers? Why shouldn't the Alibaba capital gains be taxed?
Re: Yahoo to Spin Off Its Core Businesses
#144Any reason I shouldn't see this as a complicated tax dodge? Simply more multinational pilfering from public coffers? Why shouldn't the Alibaba capital gains be taxed?
I assume your question was intended as rhetorical, but there's an actual answer to it: because when the owner of the Yahoo stock (or a hypothetical Yahoo holding company for Alibaba stock) sells his shares, he will pay tax on his gain from that holding.
To turn the question on its head: why should some capital gains be taxed twice and others once (or in rare cases, three times or not at all)?
Re: Yahoo to Spin Off Its Core Businesses
#145I'm not sure I quite understand. The article puts Yahoo's Alibaba stake at 31bn. Google finance is reporting Yahoo's market cap as 32.75bn. Does this mean that Yahoo's non-Alibaba value is a rounding error?
You're forgetting Yahoo Japan, a separate company that Yahoo owns a stake in. According to the numbers, Yahoo's core Internet businesses have been worth less than zero . http://www.bloombergview.com/articles/2014-04-17/how-can-yah...
And don't forget $5B in cash.
Re: Yahoo to Spin Off Its Core Businesses
#146Certainly the end of the beginning. Yahoo!, one of perhaps a handful of companies, was the first "Internet"[1]. Those companies blazed an interesting trail and brought the mainstream population of the US into the "online" world. That they emerged across the chasm that was the dot.com crash, was a testament to the amount of momentum they carried with them. I have a tremendous amount of respect for them, but even with…
When/why do you expect Google to implode?
Re: Yahoo to Spin Off Its Core Businesses
#147Yahoo had to do this. They had been hanging onto the belief that the IRS wouldn't tax their Alibaba spin out, a belief that they and their tax accountants alone believed. Most telling is that Yahoo was up after the markets closed on this news. Heck Bloomberg just sent me a note saying the sentiment of the news on Yahoo was very positive, even the machines like this news:) Sadly this probably means 3 things are going…
> > Yahoo’s shift in strategy comes as Ms. Mayer and her husband, Zachary Bogue, are expecting the birth of twin daughters this month
> I hope she takes a full year off, if not more. The past 4 years couldn't have been easy on her. It will be interesting to see what she does next.
Do you think other CEOs don't have children, or don't have hard jobs? Running a profitable growing company is as hard as failing to save a dying company.
Re: Yahoo to Spin Off Its Core Businesses
#148Yahoo had to do this. They had been hanging onto the belief that the IRS wouldn't tax their Alibaba spin out, a belief that they and their tax accountants alone believed. Most telling is that Yahoo was up after the markets closed on this news. Heck Bloomberg just sent me a note saying the sentiment of the news on Yahoo was very positive, even the machines like this news:) Sadly this probably means 3 things are going…
Maybe it's the opposite. I feel like people seemed to like working at Yahoo while she was there...but no great new products... I do hope they find a good home for Flickr...I will miss it terribly if it is gone.
Chairman and CEO have denied any plan for selling Yahoo. Their plan is to get a tax free separation of its core business from Alibaba. This reverse spin off according to them most likely to get the tax benefit. The other way - forward spin off too would have been tax free but that would have taken multiple years while this would only take 1.
Re: Yahoo to Spin Off Its Core Businesses
#149What's the difference aside from the tax liability? Either way you wind up with two companies. One with the Alibaba shares, and the other with everything else.
Re: Yahoo to Spin Off Its Core Businesses
#150Honest question: what has been Yahoo's core business for the last 15 years?
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That wasn't the question. The question was what Yahoo's business has been for the last 15 years, not what it was when the company was founded.
The actual answer is that Yahoo sells ads. That's their business model, just like it's Google's and Facebook's and hundreds of other companies', some very old and some founded yesterday.