Dive Brief:
- Yahoo’s board of directors on Friday wrapped up the final day of meetings that could decide the future of the company, Reuters reported.
- One option on the table for the nine board members is whether to sell Yahoo's core business.
- The company is also deciding whether to continue with the spinoff of its $30 billion stake in Chinese e-commerce company Alibaba Group Holdings Ltd.
Dive Insight:
Robert Peck, a SunTrust analyst, said the Yahoo board may delay any decisions because of the complexity of some of the options.
"While many investors may simply apply a mid single-digit EBITDA multiple to value the core, we believe the value is more intricate," Peck said.
Last month, Starboard Value's Managing Member Jeffrey C. Smith said that Yahoo should be exploring a sale of its core business of search and display advertising rather than selling its shares in Alibaba.
The Alibaba stake dates back to 2005, when Yahoo paid $1 billion for 40% of the company.
Smith said Yahoo is the only "Silicon Valley company we know that currently has a stock price almost entirely driven by the value of an entity outside of its control," referring to the company’s stake in Alibaba.
Smith threatened that his firm "will look to make significant changes to the Board if you continue to make decisions that destroy shareholder value."
Yahoo's revenue grew 6.8% in the third quarter, but profits dropped to $76 million. The company also saw several key staff members leave.
