Yahoo! Inc. (YHOO)’s Marissa Mayer’s $15 billion Dilemma

If you are wondering why Yahoo! Inc. (NASDAQ:YHOO) has still not announced plans to take advantage of the tax efficiencies from its stake in Alibaba Group Holding Ltd (NYSE:BABA), you have come to the right place. On Bloomberg, Leslie Picker shed some light on the dilemma that Mayer is currently caught in with regards to Yahoo’s stake in the Chinese e-commerce giant.

“[…] What I think is interesting about their tax bill is that it depends on their strategy. If they just do a spinoff like Starboard is proposing, they won’t have access to that cash. that value from their Alibaba stake and potentially Yahoo Japan will be distributed to the shareholders and newly formed unit company. So, she will really will have just kind of the core business to be in charge of with sure some cash from their original share sale from Alibaba’s IPO, but not from the remaining stake […],” said Picker.

If Marissa Mayer has any chance of staging a comeback for Yahoo! Inc. (NASDAQ:YHOO), it cannot be without the firepower of its Alibaba stake. At the same time it is rather harsh if  Yahoo shareholders have to bear the $15 billion dollar bill, just for Mayer to take a shot at reviving the company’s core operations, which according to Picker were getting a negative valuation until a few weeks ago.

Moreover, as far as Mayer’s track record at Yahoo! Inc. (NASDAQ:YHOO) is concerned the only positive thing she has had going on for her is that she managed to hold onto much more of Alibaba’s stock than she was expected to post IPO. Other than that most of her acquisitions have not really panned out and many believe that she is paying for them much more than they are actually worth.

Yahoo! Inc. (NASDAQ:YHOO) is currently down about 1% for the day and is trading at $51.2.

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