In an SEC filing, Yahoo’s newly-appointed CEO hints at a restructuring and a new plan for the billions it expects from the company’s stake in Alibaba.
Yahoo’s new CEO, Marissa Mayer, says in an SEC filing that she might restructure the business and, as a result, might not give back to shareholders the billions in proceeds it expects to get from the sale of Yahoo’s stake in Alibaba Group.
Instead, Yahoo hints that it might use the money to make acquisitions — news, not surprisingly, that Wall Street didn’t like. Shares of Yahoo, which are up 2.6 percent since Mayer took the job last month, were off almost 4 percent in after-hours trading at $15.40.
Here are some key parts from the SEC Filing:
New Chief Executive Officer and Review of Business Strategy On July 17, 2012, Marissa A. Mayer became our Chief Executive Officer and a member of our Board of Directors. Ms. Mayer is engaging in a review of the Company’s business strategy to enhance long term shareholder value. As part of that review, Ms. Mayer intends to review with the Board of Directors, among other things, the Company’s growth and acquisition strategy, the restructuring plan we began implementing in the second quarter of 2012, and the Company’s cash position and planned capital allocation strategy. This review process may lead to a reevaluation of, or changes to, our current plans, including our restructuring plan, our share repurchase program, and our previously announced plans for returning to shareholders substantially all of the after tax cash proceeds of the initial share repurchase by Alibaba Group under the Repurchase Agreement described below.
Ms. Mayer is engaging in a review of the Company’s business strategy to enhance long term shareholder value. As part of that review, Ms. Mayer intends to review with the Board of Directors, among other things, the Company’s growth and acquisition strategy, the restructuring plan the Company began implementing in the second quarter of 2012, and the Company’s cash position and planned capital allocation strategy. This review process may lead to a reevaluation of, or changes to, the Company’s current plans, including its restructuring plan, its share repurchase program, and its previously announced plans for returning to shareholders substantially all of the after tax cash proceeds of the initial share repurchase by Alibaba Group under the Repurchase Agreement…
Yahoo reached the deal with Alibaba in May, when Ross Levinsohn was the interim CEO. The company agreed to would sell its stake in China’s largest e-commerce company for about $7 billion. At the time, Levinsohn said that the “agreement provides clarity for our shareholders on a substantial component of Yahoo’s value….”
So much for that. This is Yahoo, after all, and clarity only lasts so long.
The filing bolsters a Wall Street Journal report earlier today that suggested Mayer is looking closely at acquisitions. Though the same report also said her first priority will be to fix Yahoo Search and Mail.