Friday, July 29, 2016

Well...that didn't take long....

Earlier this week,Verizon announced an agreement in-principle to acquire the "core" non-Asian assets of Yahoo! for a piddling $4.8 Billion. A far, sad cry from the $45 Billion Microsoft was willing to pay back in 2008.  The deal excludes Yahoo!'s Alibaba (BABA) and Yahoo! Japan (TYO:4689) holdings.   These excluded assets have current (inflated/fake) values based on the publicly traded pro-rata Market Caps of $32 Billion & $8 Billion respectively (approximately $4 Billion over the current Market Cap of Yahoo!) The asset sale leaves a $45 Billion "Investment Company" shell in the deal's wake.

Here's a line from my 11/20/2014 post on Laura Logan's CBS News page (and this blog re-posted on 12/13/2105).

When this scheme is discovered, the results will be devastating. BABA stock will be worthless. Yahoo will be out of business. 

I'm projecting that Marissa Mayer, and any other executives or board members with first hand knowledge of this mess will resign relatively soon. It's the only logical choice for them to make.

One down (Yahoo! asset sale).....and two (BABA crash & Ms. Mayer's departure) predictions to go.

Not to toot my own horn or anything, but I don't recall any of the main-stream financial media (with the sole exception of Deep Throat IPO) predicting that Yahoo! would be groveling for a buyer and eventually absorbed for a pittance, right after the "Greatest IPO in History" back in the fall of 2014.

Looking forward, Yahoo! assets included in the deal will be combined with AOL content to form a presumably nostalgia-driven portal that we baby boomers will continue to relentlessly visit, much the same way we've clung to our land-lines and fax machines.  Or to paraphrase the late Charlton Heston, you'll have to "pry my Yahoo! News from my cold dead hand."

Presumably, in yet another effort for the Yahoo! board to distance themselves from the insider trading issues  (17 CFR 240.10b5-1as discussed previously in this blogMs. Mayer has also, most likely, been "sold" along with the Yahoo! assets.  Her resignation from the remaining Yahoo! "Investment Company" should be forthcoming.  The only remaining question is how large her departure package will be.  The aforementioned is most likely part of the "dot the i's & cross the t's" negotiations.  As  shareholders routinely re-learn, silence can be expensive.

So there you have it.....the first shoe (Yahoo! going "out of business") has just hit the floor.  The second shoe (Ms. Mayer's resignation), at least from the remaining Yahoo! Investment Company will follow as the Verizon deal nears completion by Q1 2017.

Of course, the third shoe (Alibaba collapse) has been discussed at length throughout the bowels of this blog.  It will be interesting to see what impact the collapse of the Alibaba (BABA) stock price might have on the Verizon deal if it occurs prior to the completion of the asset sale.  In any case, the clock is ticking for current Yahoo Shareholders to be able to escape unscathed.  With the departure of Ms. Mayer and other insiders, along with the expiration of their insider liability, Yahoo! shareholders will finally be free to "unlock their Alibaba value" (i.e. get out) sometime after Q1 2017.  They'll be allowed to sell their shares in the remaining "Investment Company" and finally reap the rewards of the Alibaba IPO.  For their sake (and the sake of the global financial markets) let's hope that Jack and company can figure out how to keep the stock price propped up long enough for the loyal Yahoos!s, Jeff Smith and other leveraged activist investors to get out.  Jack and company will have to spend lots of shape-shifting money somehow laundered/borrowed from Ant Financial, the hard working Chinese people and the related web of offshore shells to do it, but the way I see it, their success in maintaining the current (fake) Alibaba stock price is the only chance Yahoo! shareholders will have to get out.  In this particular case, the relentless flow of monopoly money pouring into US assets from China is oddly, at least in the near term, a good thing for Yahoo! shareholders.

Switching topics, I'd like to take a paragraph to thank you, my loyal readers for your support.  In June our little blog exceeded 30,000 page views and it looks like it's going to come close to 35,000 page views in July.  I'm truly gratified that, by definition, since we do NO advertising (Note the conspicuous absence of "Viagra Pop-Ups", "Buy Gold", "Matchmaking", "Troubled Credit Loans" and "Click Here for a Free Trial" ads.) that we've generated so much interest and enthusiasm for these topics.  The people who read my content (aka: you), again by definition, are smart, inquisitive, open-minded people who are curious about the topics I enjoy exploring. Consequently, they/you've found it worthwhile to share my work with other like-minded folks.

I thank you from the bottom of my heart!


Other Reading:

DT Post - December 2015
http://deep-throat-ipo.blogspot.com/2015/12/breaking-news-yahoo-ceo-marissa-mayer.html

The Last Days....
http://www.forbes.com/sites/miguelhelft/2015/11/19/the-last-days-of-marissa-mayer/#669903fd6bff

Marissa Meyer Final Letter to Employees
http://www.forbes.com/sites/briansolomon/2016/07/25/here-is-marissa-mayers-final-letter-to-yahoo-employees/#5900cb3975ba

The Economist - Yahoo!/Verizon Deal Analysis
http://www.economist.com/news/business/21702779-telecoms-giant-has-made-bold-risky-bet-future-advertising-does-it-ad-up?cid1=cust/ednew/n/bl/n/20160728n/owned/n/n/nwl/n/n/NA/n

Marissa Meyer - SEC Form 4
http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001550608&type=&dateb=&owner=include&start=0&count=40

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