Yahoo can actually contribute to an improved share price if its sell its core assets in the coming times
Yahoo Inc. would never stop making in the news until it comes up with a proper solution that would decide its future once and for all. The internet firm is hanging in between selling its core internet business or spin off stakes in the Asian assets i.e. Alibaba and Yahoo Japan. The company is constantly been asked and forced by its investors and shareholders to come up with a final decision but the board of directors is delaying it for unknown reasons.
For the past couple of months the activist investors of the firm, Starboard Value LP and Canyon Capital Advisors, are urging Yahoo to sell its core internet and advertising business as well as finalize its decision regarding the Asian assets. Furthermore, Canyon Capital Advisors have warned the company to not waste the capital that has provided anymore and prioritize its future first. Reuters reported that if Yahoo continues by selling its core assets then the share price could increase easily.
The latest edition of Barron reported that the shareholder pressure is increasing which is urging the search engine giant to sell its business as well as separate its Asian assets from its main business. According to reports, the overall sales of the business and its stakes in the Asian assets could see its stock price increase by $40 on one share. This will be a 35 percent increase from the $29.14 closing of market on Friday.
Barron stated that the shares of the firm look appealing as its asset value accounts to a price of $48 per share.
Apart from this, Starboard Value LP is ramping up pressure as the investment firm is not satisfied with the performance of the CEO, Marissa Mayers, and her management team. Starboard raised the prospect that a proxy battle might be approaching amid weak leadership of the CEO. The investment firm wants Yahoo to bid farewell to its management team as soon as possible. Other investors said that the company should either fire Marissa Mayers and her team or sell its business immediately.
Starboard Value did not name the CEO specifically in the letter but wanted them to be gone for its betterment. Analysts were pretty sure that the sale would boost the company’s value one way or another. As of now, the market value is actually dependent on the stakes that it has in Alibaba and Yahoo Japan and its business value is currently in negative.
Yahoo stock stood at $29.74 at market close on Tuesday January 19.
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