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Wed, Feb. 3, 7:30 PM
- Shortly after Yahoo (NASDAQ:YHOO) confirmed it's exploring "additional strategic alternatives" while pushing ahead with a reverse spinoff of its core business, the FT reports Bain, TPG, and other P-E firms are weighing potential bids for core Yahoo. The paper adds AT&T (NYSE:T) and InterActiveCorp (NASDAQ:IAC) "are also believed to be examining the company."
- Many firms are expected to make full or partial bids for core Yahoo. CFO Ken Goldman: "A number of companies have said they want to look at us, and there are a number of private equity firms that are interested in looking at us. I’m not saying that we’ve received offers ... I’m saying parties have expressed interest in us. And what we’re saying is that we’ll be open [to] that.”
- Re/code's Kara Swisher reports Yahoo has hired well-known tech i-banker Frank Quattrone to help it explore options; Goldman Sachs and Morgan Stanley are already on the payroll. "It is clear to us that what is happening inside is very dysfunctional," says an unnamed major investor talking to Swisher.
- Meanwhile, with a sale effort and job cuts already expected, Yahoo fell below $28 in regular trading following its Q4 report and myriad of job cut, writedown, and strategic review announcements. Weak guidance may have weighed: Yahoo guided in its earnings slides (.pdf) for Q1 GAAP revenue of $1.05B-$1.09B and 2016 revenue of $4.4B-$4.6B, below consensus estimates of $1.14B and $4.78B.
2016 ex-TAC revenue guidance of $3.4B-$3.6B is below 2015 ex-TAC revenue of $4.09B, which itself was below 2014's $4.4B. Non-GAAP op. income is expected to drop to $150M-$250M from 2015's $342M and 2014's $755M.
- Also of note: 1) $230M of Yahoo's $4.46B goodwill writedown was related to the $1.1B Tumblr acquisition. On the earnings call (transcript), Yahoo disclosed Tumblr failed to hit the company's $100M 2015 revenue target. 2) Along with everything else, Yahoo has begun exploring the sale of "non-strategic assets" such as patents and real estate. It estimates such sales could yield $1B-$3B in cash by year's end.
- Prior Yahoo coverage
Tue, Feb. 2, 5:10 PM
- Q4 adjusted EBITDA of $215M vs. $409M a year ago. Full-year adjusted EBITDA of $952M vs. $1.362B. Non-GAAP EPS of $0.13 vs. $0.30. Full-year of $0.59 vs. $1.57.
- The company took a $4.461B goodwill writedown in Q4, making the quarter a net loss of $4.435B.
- Mavens revenue of 472M vs. $375M a year ago. Non-mavens of $750M vs. $751M. The just-announced strategic plan calls for Mavens revenue to hit $1.8B this year vs. $1.66B in 2015.
- Mobile revenue of $291M vs. $254M a year ago. PC revenue of $931M vs. $872M.
- Gross search revenue of $866M down 7% Y/Y. Full-year search revenue of $3.612B up 7% from 2014.
- In board news, Charles Schwab has resigned from his post as a director, and at this point there's no replacement.
- The conference call is just getting underway.
- Previously: Yahoo to cut 15% of workforce as part of strategic plan (Feb. 2)
- Previously: Yahoo EPS in-line, misses on revenue (Feb. 2)
- YHOO -0.9% after hours
Tue, Feb. 2, 4:44 PM
- The company through its plan hopes to get to an adjusted EBITDA run rate of roughly $1B by H2 of this year. Operating expenses are to be cut by $400M by year-end. Asset sales are hoped to raise more than $1B in cash.
- Revenue in Mavens (mobile, video, native, and social) is hoped to reach $1.8B this year.
- In consumer products, the company will consist of three global platforms: Search, Mail, and Tumblr, and four verticals: News, Sports, Finance, and Lifestyle. For advertisers, Yahoo will be defined by two core offerings: Gemini and BrightRoll.
- As for search, it's all about mobile, and the company will shift most of its resources in this area to more "forward-leaning" mobile search investments.
- Along with job cuts of 15%, the company will exit five offices in Dubai, Mexico City, Buenos Aires, Madrid, and Milan. Most of these changes will take place in Q1, and Yahoo will have about 9K employees by year-end, and less than 1K contractors.
- Conference call at 5 ET
- Previously: Yahoo EPS in-line, misses on revenue (Feb. 2)
- YHOO -1.6% after hours
Tue, Feb. 2, 4:34 PM
Tue, Feb. 2, 3:24 PM
- Yahoo (NASDAQ:YHOO) shares have jumped on news from Dow Jones that Yahoo will say it's exploring "strategic alternatives" in its aftermarket earnings commentary today.
- Shares were down as much as 4.9% and have leapt to just a 0.4% decline.
- It's the strongest indication yet that the company will consider a sale of all or part of its Web business.
- The board has a fiduciary duty to listen to offers, which could come from Verizon (NYSE:VZ) or from private-equity firms that have expressed interest in parts of the business.
- Sales have fallen at Yahoo in seven of the past 10 quarters.
Mon, Feb. 1, 5:35 PM
Mon, Feb. 1, 11:20 AM
- Ahead of Tuesday afternoon's Q4 report, the WSJ reports Yahoo (YHOO -1%) plans to unveil a cost-cutting plan (in tandem with the report) that includes shuttering several business units and laying off up to 15% of its workforce. Business Insider reported in January Yahoo is planning to cut at least 10% of its workforce.
- The WSJ's report comes three months after one from Re/code stating Yahoo, which has already carried out multiple job cuts amid ongoing display ad revenue pressures/share loss - has hired McKinsey to help decide which businesses to keep or sell. Headcount was at 10.7K as of Yahoo's most recent quarter, down from a peak of 14K.
- The WSJ observes a restructuring could help Yahoo look more appealing to a potential acquirer, as well as fend off activists calling for job cuts and critical of Marissa Mayer's performance. Reuters has reported Yahoo has turned down offers from P-E firms and others for its core business. The WSJ's sources state Yahoo's board "has put off any serious [buyout] talks for now."
Thu, Jan. 28, 8:00 AM
- Alibaba's (NYSE:BABA) is up 2.8% premarket after posting an FQ3 beat fueled by improving Chinese marketplace monetization. Yahoo (NASDAQ:YHOO), whose value remains heavily tied to its 384M-share Alibaba stake, is up 2.4% ahead of its Feb. 2 Q4 report. Top Alibaba rival JD.com (NASDAQ:JD) is also up 2.4%.
- Chinese marketplace performance: Alibaba's Chinese retail marketplace (Taobao/Tmall) GMV rose 23% Y/Y in FQ3 to $149B, a slowdown in growth from FQ2's 28% and FQ1's 34%. However, monetization/take rate improved to 2.98% from 2.7% a year ago, thanks to a surge in mobile monetization rate to 2.88% from 1.96%. That allowed Chinese retail commerce revenue to rise 35% to $4.4B (83% of total revenue), even with FQ2's growth rate.
Marketplace annual active buyers rose by 21M Q/Q to 407M; mobile MAUs rose by 47M to 393M. Mobile was 68% of GMV vs. 62% in FQ2 and 42% a year ago, and 65% of Chinese retail revenue. Alibaba predicts Chinese commerce revenue will grow faster than GMV "for the foreseeable future." The company also says it has "taken aggressive steps to capture market share in key cities and key categories."
- Other businesses: Chinese wholesale commerce revenue +35% Y/Y to $179M. International commerce +17% to $318M, with retail revenue totaling $97M and wholesale $221M. Cloud computing & Internet infrastructure (inc. AliCloud) +126% to $126M. Other businesses -7% to $277M.
The Koubei local services JV with Alipay parent Ant Financial produced GMV of $2.4B, with daily transactions average more than 5M in December. Same-day delivery is offered in seven major cities via Alibaba's logistics platform, and next-day delivery in 88 cities (up from 41 in FQ1).
- Financials: Cost of revenue rose to 32% of revenue from 29% a year ago, thanks to higher traffic acquisition costs and investments in new businesses. R&D and sales/marketing spend each fell to 11% of revenue from 12%, and G&A to 7% from 9%. Overall, costs/expenses were 64% of revenue if including stock compensation, and 51% if excluding it.
Free cash flow totaled $3.66B, topping net income of $2.53B. Alibaba ended FQ3 with $18.3B in cash and $8.3B in senior notes/bank borrowings.
- In other news, the WSJ reports Alibaba has agreed to sell its stake in Chinese local services leader Meituan-Dianping (MEIT - competes with Koubei) for ~$900M. The sale price involves a ~$12.5B valuation, less than the $15B Meituan-Dianping was valued at in a recent funding round.
- Alibaba's FQ3 results, earnings release
- Update (11:08AM ET): Alibaba has given back its premarket gains: Shares are now down 1.7%. Yahoo is down 1%.
Thu, Jan. 28, 12:59 AM
- On Jan. 23 the New York Post reported that Verizon (NYSE:VZ) made an $8B bid for Yahoo's (NASDAQ:YHOO) core business.
- Bob Varettoni, director of corporate communications for Verizon, told CTFN tonight the rumors are false. "The New York Post was wrong. We've made no offer to acquire Yahoo."
- Yahoo reports earnings on Feb. 2.
- Note: Reuters: Yahoo to wait for earnings for strategic steps (Jan. 21)
- More than 1/3 of Yahoo's workforce has left in the last year (Jan. 10)
- Verizon, Yahoo And Best Idea For 2016 (Jan. 6 2016)
Thu, Jan. 21, 6:38 PM
- Yahoo (YHOO +1.8%) isn't rushing key strategic decisions, planning to make its next steps only after its release of quarterly earnings on Feb. 2, Reuters says.
- Sources suggest the company wants to present a strategic vision and then gauge shareholder reaction before making any big moves.
- There's some debate about how resistant Yahoo is to calls to sell its core Internet business. The company said it would pursue a tax-free spinoff, but Reuters said the company turned away "several" potential buyers, including private-equity firms.
- After hours: YHOO -0.5%.
- Previously: Canyon tells Yahoo it can't waste any more capital (Jan. 15 2016)
- Previously: More than 1/3 of Yahoo's workforce has left in the last year (Jan. 10 2016)
Wed, Jan. 20, 11:47 AM
- Tech large-caps aren't being spared as the Nasdaq drops 2.6%, and the S&P 2.7%, in the market's latest plunge. A slew of companies with $10B+ market caps are seeing declines that on many recent days were largely reserved for smaller ex-momentum plays.
- The casualty list includes Alibaba (BABA -5.3%), and that of course means Yahoo (YHOO -6%) is along for the ride. Top Alibaba rival JD.com (JD -6.2%) is also down strongly; Chinese macro fears continue to run high.
- Facebook (FB -4.9%), which (unlike most peers) remains well above where it traded 12 months ago, has fallen towards $90. Q4 results arrive on Jan. 27.
- Cisco (CSCO -5.2%) has fallen below $23. Possibly weighing: Piper's Troy Jensen has reported weak Q4 networking reseller survey results, and predicts Cisco will issue light FQ3 (April quarter) guidance next month with its FQ2 report. His FQ3 sales estimate has been cut by $400M to $11.9B (below a $12.07B consensus).
- DRAM/NAND flash maker Micron (MU -10.3%) is among the biggest decliners, with shares falling into the single digits. Micron now trades for 6.6x an FY17 (ends Aug. '17) EPS consensus of $1.48. Online payments leader PayPal (PYPL -4.4%) is having a rough day as well.
- IBM (IBM -4.7%), meanwhile, has made new multi-year lows after providing soft 2016 EPS guidance to go with a slight Q4 beat. Netflix (NFLX -6%) has sold off in spite of reporting strong Q4 subscriber adds.
Fri, Jan. 15, 7:18 AM
- Canyon Capital Advisors has sent a new letter to Yahoo's (NASDAQ:YHOO) board, asking it not to waste any further capital and to prioritize a sale of its core business, a portion of its assets, or the entire company.
- "The internet company's board and management team have spent in excess of $3B on acquisitions to which, based on the its stock price, the market appears to ascribe absolutely no, or negative, value."
- The letter comes after activist Starboard Value last week ramped up pressure on Yahoo, taking aim at CEO Marissa Mayer and her leadership team and raising the prospect that a proxy battle is approaching.
- YHOO -2.1% premarket
Sun, Jan. 10, 6:46 PM
- Talking with more than 15 current and past Yahoo (NASDAQ:YHOO) employees, NYT says many have lost faith in Marissa Mayer's leadership.
- Only 34% of employees believe that Yahoo’s prospects are improving, compared with 61% at Twitter (another troubled tech company) and 77% at Google.
- Jeff Bonforte, an SVP and Mayer fan, says that she's the best boss he's ever had. But he also admits she's tightfisted with praise and sometimes displays a demoralizing harshness. "Marissa is the type of boss that makes you feel like you’re disappointing her at all times, so I always feel like I’m on the verge of being fired. It’s never, ‘Way to go, Jeff!'"
- As some investors press Yahoo to fire her, Mayer is crafting a last-ditch plan to streamline the company, including significant layoffs, that is expected to be announced before month’s end.
- Related: Verizon, Yahoo And Best Idea For 2016 (Jan. 6)
- Related: Yahoo's Core Is An Ideal LBO Target (Jan. 4)
- Related: Yahoo: Don't Depend On Faith And A Belief System (Dec. 16)
Fri, Jan. 8, 2:07 PM
- Bloomberg reports Yahoo (NASDAQ:YHOO) is reconsidering the spinoff of its core business, and is now open to selling it. Shares have spiked higher in response.
- Activist Starboard Value has called for a sale of core Yahoo. The company announced in December (along with the cancellation of its Alibaba stake spinoff plans) it would explore a spinoff of its non-Alibaba assets.
- Bloomberg cautions Yahoo hasn't yet decided whether to sell the core business or hired a bank to run a sale process. If core Yahoo goes on the block, various P-E, Web, media, and telco firms are expected to bid for all or parts of the business.
Thu, Jan. 7, 2:01 AM
- Yahoo (NASDAQ:YHOO) is working on a plan to cut its workforce by at least 10% and it could start the process as early as this month, Business Insider reports.
- The layoffs, which would result in more than 1,000 people leaving the tech giant, is set to affect Yahoo's media business, European operations, and platforms-technology group.
- The move also follows Starboard Value's letter to Yahoo on Wednesday, which took aim at CEO Marissa Mayer, her leadership team, and raised the prospect that a proxy battle may be on the way.
- Previously: Starboard Pressures Yahoo, Demands Board Changes, New Strategy (Jan. 06 2016)
Wed, Jan. 6, 9:49 AM
- Activist Starboard Value has delivered a letter to Yahoo’s (YHOO -0.3%) board of directors urging a change of management, “changes in Board composition, and changes in strategy.”
- In addition, CNBC reports that Starboard has been contacted by potential buyers of Yahoo's core business.
- “The past year has been an extremely frustrating one for shareholders of Yahoo!,” the letter said, adding that the Alibaba spin-off “turned out to be a failed effort due to a changing tax landscape and serious concerns over the potential for massive tax liability.”
- A decline in Yahoo’s core business was also a major theme: “Also frustrating for us, and likely for you, has been the continued downward spiral of the operating and financial performance of Yahoo's core Search and Display advertising businesses”.
- “Yahoo's current management has had over three years to demonstrate progress towards improving the Core Business, but despite these efforts, the Core Business continues to be plagued with deteriorating financial performance and an accelerating number of executive leadership departures. Annual operating costs have ballooned, increasing by approximately $500 million despite revenue that has been declining. In addition, the Company has spent over $2.3 billion on acquisitions. Unfortunately, most of these investments have been misguided, poorly overseen, and, ultimately, shut down.”
- Starboard notes that EBITDA continues a decline almost every quarter, and rejects the company’s recent announcement that it will shift focus. “Your solution to just announce a change in direction of the spin and that it will require another year for shareholders to wait while the existing leadership continues to destroy value is not acceptable.”
- Other activists - Canyon Capital Advisors and SpringOwl Asset Management - have also called for changes at YHOO to improve shareholder value.
- Previously: YHOO to explore various spinoff options
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