Yahoo! Inc. (NASDAQ:YHOO)’s decision to spin off its stake in Alibaba Group Holding Ltd (NYSE:BABA) is the right decision and Chief Executive Marissa Mayer’s plan is a work in progress, Greg Maffei of Liberty Media told CNBC in a discussion.
“I think [Mayer’s plan so far] is a work in progress. This was a had-to-do thing, it was almost inevitable, I think. […] The transformation of the business where she’s investing in mobile primarily and trying to move from display to native ads and the like, I think that’s a work in progress,” Maffei remarked.
Yahoo! Inc. spinning off its Alibaba Group Holding Ltd stake, the company has announced, following pressure chiefly from activist investor Jeffrey Smith of Starboard Value LP. The institutional investment firm bought a stake of about 7.72 million Yahoo! shares by the end of September last year which makes up 10.97% of Starboard’s whole portfolio.
“I think spinning it was the right thing and she did the right thing. The prior taxable sale was a horrible transaction. If you go back, the original investment in Alibaba by Jerry Yang, one of the all-time great deals. The decision before Marissa Mayer and this team got there to sell half of the stake taxably early reduced their leverage [and] was a terrible deal,” Maffei said.
Yahoo! Inc.’s decision to spin off into a separate entity its Alibaba Group Holding Ltd stake is a great deal that Liberty Media would do itself if it were in the situation, Maffei said.
Another institutional investor which substantially increased its Yahoo! Inc. stake in the third quarter of 2014 is John Burbank’s Passport Capital which owned about 7.48 million shares by the end of September, a 1,232% increase quarter over quarter. Also by the end of September, Lee Ainslie’s Maverick Capital owned 2.2 million Alibaba Group Holding Ltd shares.
