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. (NASDAQ:YHOO) spinning off its Alibaba Group Holding Ltd (NYSE:BABA) 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. (NASDAQ:YHOO)’s decision to spin off into a separate entity its Alibaba Group Holding Ltd (NYSE:BABA) 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. (NASDAQ:YHOO) 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 (NYSE:BABA) shares.