Starboard asks Yahoo to sell core business instead of Alibaba stake | Hacker News Reader

Starboard asks Yahoo to sell core business instead of Alibaba stake

reuters.com

11 pointsmauriziodaniele9 comments

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Why should any company listen to "shareholders"?

Shareholders don't think long-term.

Shareholders prefer the immediate cash out gratification.

Warren Buffett does not listen to shareholders for the same reason. They are not thinking about the business.

Unfortunately, too many CEOs think the same way -- immediate cash out, screw the long-term growth.

The most basic answer is that the "shareholders" are the owners of the business. Shareholders do think "long-term" in the sense that they believe their capital could achieve better returns in other areas and hence the desire to "cash out".

They are welcome to sell their shares anytime. Being a shareholder does not mean that a shareholder runs the business. A shareholder can sell their shares or vote for a different board. That is it.

I'm not sure why either Starboard or the reporter thinks this is newsworthy. After you read the background, at the very end of the article you come to this little nugget of obviousity that every reader was waiting for: "Many analysts attribute little or no value to the business ..." Yeah, exactly. Yahoo!'s operating entity is totally and utterly worthless. No one would buy it. It's not even clear that you could construct a transaction in which Yahoo!'s current shareholders pay someone to take it off their hands.

The sad fact is that for most Yahoo! shareholders, the best deal on offer is going to be giving the US government 35% of the value of those foreign holdings and then selling their stock in what's left for $0. Starboard is just wriggling on the hook and looking for ways to avoid booking the inevitable massive loss on this holding. The IRS knows this and their private letter ruling denial is just them playing hardball. It's not right or fair, but if the IRS were a business partner, it's exactly what you'd expect.

Reuters cites no sources for the "little or no value." It could be made up from whole cloth. "Some people say" isn't journalism.

Starboard's own analysts assign a value around $2 billion.

That value could just be in assets, like hardware and office space. The Yahoo! product offering is what's worth "little or no value". They have 0 products that are number 1 in any market. They have no vision, no big projects, no R&D, and the only time I hear about Yahoo is when someone is wondering why they're still around.

Yahoo! makes actual money. Step away from the meaningless stats and realize being a top 5 global website for the last decade take execution beyond most 'unicorn' startups.

Sure they make money, but so do chinese knock-offs. That's what Yahoo is, a cheap rip-off of better internet services. They do search, but google is better. They do email, but outlook and gmail is better. They do ads, but facebook and google are better. They do news, but there's no money in that given the ridiculous number of companies in the news space.

Seriously, go to yahoo.com and try and figure out what this company is about. It's just a portal with all sorts of links to other garbage. It's a remnant of 90s internet. Yahoo tried to revamp their mail solution a year ago and their users threw a huge fit because "it's different and I don't like change!". That's the only thing keeping them running; a contingent of luddite users.

If Yahoo's users leave, they're done. You can't say the same for Google, they're now expanding into automobiles. And Facebook is moving into video games. These are companies with vision and an outlook for the future. Where is that for Yahoo? It's not enough just to make money any more.

YHOO shows $477.08M ttm EBITDA, $0.25 ttm EPS on $4.95B ttm revenue, with $5.8B cash. [1] This is almost completely attributable to Yahoo Inc. operations (like search and ads), not investments. So in my thinking "totally and utterly worthless" is not an accurate characterization.

[1] https://finance.yahoo.com/q/ks?s=YHOO+Key+Statistics

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