NDAQ:YHOO - Post Discussion
Yahoo! Inc
> This play is all good for Yahoo Share price going forward
Post by
HARJAY on Sep 28, 2014 2:04pm
This play is all good for Yahoo Share price going forward
Unlock Value’
In his letter yesterday to Yahoo CEO Marissa Mayer, Smith said the Web company should explore a combination with AOL to “unlock value,” cut losses in its display-ad business by $250 million to $500 million, and stop acquiring other companies. A combination with AOL could deliver cost cuts of as much as $1 billion, he wrote.
Smith also said Yahoo’s Asian assets are worth about $11 billion, or “$11 per share more than the current enterprise value of the company.” Yahoo, which owns a stake in Alibaba Group Holding Ltd., dropped after selling some shares in the e-commerce company’s initial public offering last week, putting its value below that of the combined value of its Asian assets. That is the gap that needs to be closed, Smith said.
“Clearly Yahoo is deeply undervalued relative to the sum of its parts,” Smith said in the letter. He added that the fund now has a “significant” stake in Yahoo, without disclosing specifics. “It is incumbent upon management and the board to take immediate steps in committing to remedy this valuation discrepancy.”
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