After Yahoo! Inc. (NASDAQ:YHOO) completes its complex spinoff of its stake in Alibaba Group Holding Ltd (NYSE:BABA), there’s no reason to own the former’s stock, Jon Najarian told his colleagues on CNBC’s Options Action.
Last month, Yahoo! Inc. (NASDAQ:YHOO) announced a multifaceted plan to spin off its take in Alibaba Group Holding Ltd (NYSE:BABA) which should make the deal tax-free instead of paying billions in taxes had the internet company decided to sell the shares outright.
“No, there’s [no reason to own Yahoo after the Alibaba spinoff]. They haven’t given us a reason to, quite frankly. Are they making progress to Miss Mayer’s [goals]? Yes, they have at Yahoo but they’re going to be a very small piece of search. They’re going to be a very small piece of mobile messaging and anything else that they may try to compete with the big guys on,” Najarian said.
Yahoo! Inc. (NASDAQ:YHOO), after it closes its transactions to spin off its Alibaba Group Holding Ltd (NYSE:BABA) stake which is expected to be completed by the last quarter of 2015, is not a company that he would like to own, Najarian said.
“Outside of Alibaba, there’s no reason to own this one right now,” Najarian concluded.
As part of Yahoo! Inc. (NASDAQ:YHOO)’s plan to avoid paying a huge amount of tax on its spinoff of its Alibaba Group Holding Ltd (NYSE:BABA) shares, the company will also be including its Small Business unit to the vehicle it is putting together.
Yahoo will, however, be keeping its 35.5% stake in Yahoo Japan.
David E. Shaw’s D.E. Shaw & Co., L.P. owned about 13.54 Yahoo! Inc. (NASDAQ:YHOO) shares by the end of the fourth quarter of 2014, down 31% quarter over quarter.
Dan Loeb’s Third Point owned 10 million shares of Alibaba Group Holding Ltd (NYSE:BABA) by the end of last year, up 39% quarter over quarter.
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