Here’s How Sovereign Wealth Funds Can Save Yahoo

Yahoo - Screenshot - Taken on February 21, 2016

Yahoo – Screenshot – Taken on February 21, 2016

The board of directors at Yahoo! Inc. made it public they formed an independent committee to begin looking at strategic alternatives for the fabled internet company. One such alternative is spinning off its core business. Yahoo announced that a new committee of directors would reach out to potentially interest parties and make recommendations on any proposed deals. Assisting Yahoo in this strategic process are Goldman Sachs, JPMorgan & Chase and PJT Partners. Cravath, Swaine & Moore LLP was hired by Yahoo as a legal advisor regarding this situation. Yahoo continues to move forward on its plans to split its core business from its 15% stake in Alibaba Group. Yahoo’s CEO Marissa Mayer still believes the company can turn itself around. Yahoo has already incurred layoffs and shut down web properties such as Yahoo Auto, Yahoo Real Estate, Yahoo Health, Yahoo Makers and Yahoo Parenting. Yahoo has also struggled with its major acquisition of Tumblr. Yahoo paid US$ 1.1 billion for the web property in 2013. Yahoo inked a US$ 230 million write down on Tumblr, as the website failed to meet its annual revenue target of over US$ 100 million.

The founder of Starboard Jeffrey Smith, which has institutional backers such as the CPPIB, is maintaining its stance on nominating a new slate of directors for Yahoo by galvanizing other key owners of the internet company.

The Activist Hedge Fund

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