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Mon, Feb. 8, 3:29 PM
- AOL chief Tim Armstrong is the point person as Verizon (VZ -0.7%) explores a bid for assets at Yahoo (YHOO -4.3%), Bloomberg reports.
- Discussions aren't far along and Verizon hasn't hired any bankers, but Armstrong is the one leading preliminary discussions, sources said.
- Another source said Armstrong was picking up on conversations he had with Yahoo CEO Marissa Mayer at the Sun Valley media conference in 2014 -- before AOL was bought by Verizon, but while he was exploring the idea of combining AOL and Yahoo. The two are both former Google executives.
- Armstrong has had a fairly free hand to run AOL as an independent advertising/media business at Verizon, and he also ran point on Verizon's $248M purchase of Millennial Media last year -- another company with which the independent AOL had begun tie-up talks.
- Yahoo has dipped today, -4.3%, to a new 52-week low of $26.48.
- Previously: Verizon confirms interest in buying Yahoo (Feb. 08 2016)
- Previously: Bain and TPG reportedly eyeing Yahoo; shares close down 4.7% post-earnings (Feb. 03 2016)
- Previously: AOL closes $248M deal for Millennial Media (Oct. 23 2015)
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, 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.
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. 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. 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.
Dec. 23, 2015, 5:44 PM
Dec. 4, 2015, 1:28 PM
- As Yahoo (NASDAQ:YHOO) wraps a few days of deliberations over its future amid speculation about whether it should focus on its core or its Alibaba stake, Mizuho is weighing in definitively: Sell the core Web business, and sell it to Comcast (CMCSA +2%).
- "It remains unclear if the IRS will tax the spin-out of Aabaco, but in our view, a taxed transaction on a likely $3-$5b sale of the core Yahoo business outweighs the risk of the company/shareholders being hit with a $20b IRS tax bill on a spin-out of Aabaco," write the firm's Neil Doshi and Sam Phan. "We think the best option for Yahoo would be to sell its core biz to a strong strategic buyer –- namely Comcast."
- The two cited four reasons for targeting the media/telecom giant as a buyer: First, skepticism that Yahoo can pull another turnaround; Comcast's existing digital assets; ad assets at Yahoo complementary to Comcast's ad business; and Comcast's strong ability to absorb a deal (with $25B in annual EBITDA, Comcast could retain debt-to-EBITDA ratio of 2:1).
- Previously: WSJ: Alibaba unlikely to buy core Yahoo business (Dec. 03 2015)
- Previously: Media companies linked to circling pack around Yahoo Internet business (Dec. 02 2015)
Nov. 6, 2015, 1:38 PM
- Alibaba is down 3.9% after fund manager Jim Chanos recommended shorting the stock (perceived accounting issues were brought up), and going long JD.com as a hedge.
- Yahoo (NASDAQ:YHOO), which has followed Alibaba higher in recent weeks (aided by Alibaba's FQ2 beat), is naturally lower in response. The company's 384M-share Alibaba stake has a pre-tax value of $31.5B.
Oct. 27, 2015, 9:22 AM
- Yahoo (NASDAQ:YHOO) has risen to $35.20 premarket after Alibaba (BABA - up 8%) beat FQ2 estimates with the help of a 12 bps Y/Y increase in Chinese marketplace monetization/take rate (contrasts with FQ1's 19 bps decline) to 2.42%.
- The trigger: Mobile monetization rate (up 52 bps Y/Y to 2.39%) is now nearly even with Alibaba's total monetziation rate, helping mobile grow to 61% of marketplace revenue from 51% in FQ1 and just 29% a year ago. Mobile monthly active users rose 13% Q/Q and 59% Y/Y to 346M, and total annual active buyers 5% Q/Q and 26% Y/Y to 386M.
- Alibaba's China marketplace GMV growth slowed to 28% Y/Y from FQ1's 34% and FQ4's 40%. Total China commerce revenue rose 35% to $2.88B, international commerce rose 14% to $289M, and cloud computing/Internet infrastructure rose 128% to $102M. EBITDA margin was flat at 50%, and free cash flow rose 52% to $2.14B (above net income of $1.46B).
- Not counting any potential tax payments, Yahoo's 384M-share Alibaba stake is now worth $31.6B.
Oct. 27, 2015, 9:17 AM
Oct. 15, 2015, 12:26 PM
- Looking to halt ongoing share losses to Gmail (or at least slow them), Yahoo (NASDAQ:YHOO) has overhauled its iOS/Android Mail apps. New features include a smarter search engine that makes suggestions based on queries and message content, the ability to fully manage Hotmail, Outlook.com, and AOL.com e-mail accounts, and social media content integration for contact profiles.
- Getting the most attention is Yahoo Account Key, a feature that lets users login without a password by linking their Yahoo account to a mobile device, and approving/denying logins via push notifications sent to the device. Yahoo argues Account Key is more secure than passwords, and eliminates the possibility of a user being unable to logic due to forgetting his/her password.
- comScore estimates Yahoo Mail had 71M U.S. users as of August, down from 96M two years earlier. Over the same time, Gmail's (GOOG, GOOGL) U.S. base, strengthened by the pre-installing of a Gmail app on devices using Google's version of Android, is believed to have grown to 135M from 96M.
- Yahoo is up strongly thanks to Alibaba, which is up 3.9%. Q3 results are due on Oct. 20.
Oct. 2, 2015, 12:13 PM
- Hammered over the last several months as macro concerns and plunging local markets took a toll, U.S.-traded Chinese tech stocks are up strongly (CQQQ +3.2%) today even as the Nasdaq and S&P post modest declines.
- Web/mobile stocks posting big gains include giants Alibaba (BABA +5.3%) and Baidu (BIDU +4.5%), with the former naturally taking Yahoo (YHOO +4%) higher with it. Yahoo rose earlier this week after stating it's still pushing ahead with a spinoff of its 384M-share Alibaba stake.
- Other gainers include Vipshop (VIPS +6.6%), SouFun (SFUN +6.2%), Qihoo (QIHU +6.7%), Youku (YOKU +5.8%), Jumei (JMEI +8%), Bitauto (BITA +5.3%), Weibo (WB +5.9%), Jumei (JMEI +8%), and Cheetah Mobile (CMCM +6.6%). Online travel leaders Ctrip and Qunar are also up big, possibly aided by new efforts from Beijing to boost Macau tourism.
- Solar winners include Yingli (YGE +4.1%), ReneSola (SOL +5.6%), and Daqo (DQ +9.4%).
- ETFs: KWEB, QQQC, EMQQ
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