Yahoo CEO Says Alibaba Stake Spinoff Proceeding as PlannedBrian Womack
Yahoo! Inc. Chief Executive Officer Marissa Mayer said that the company’s spinoff of its stake in Alibaba Group Holding Ltd. is proceeding as planned.
Yahoo shares rose as much as 2.3 percent after Mayer said she’s confident about the plan, which will distribute shares in the Chinese e-commerce company to Yahoo shareholders. It shouldn’t be affected by any potential regulatory changes, she said during an interview at the Bloomberg Technology Conference in San Francisco. The company has been reassured that any new tax steps weren’t “specific” to Yahoo, she said.
Last month, an official at the U.S. Internal Revenue Service said the agency is considering changes to rules concerning spinoffs. The Alibaba stake was valued at almost $40 billion when the spinoff was announced. Yahoo has said potential IRS changes to the tax-free treatment of spinoffs shouldn’t affect previously filed requests. The company has already lodged its plan and is still working toward undertaking the transaction in the fourth quarter, it said.
“We’re proceeding with our plan,” Mayer said. “The changes don’t apply for previous requests. These proposed changes aren’t changing the applicable law, but just changing the processes. There are many of these transactions. We feel like we should proceed with the transaction as we planned.”
The shares of Yahoo rose as high as $41.40 after Mayer’s remarks. The stock is now up less than 1 percent at $40.81 at 1:40 p.m. in New York.
Mayer, who joined the company almost three years ago, is looking for ways to jump-start growth as she faces competition from Google Inc. and Facebook Inc. During the first quarter, sales, excluding revenue shared with partner websites, fell 4 percent to $1.04 billion, missing analysts’ estimates.
The CEO also talked up Yahoo’s new partnership with the National Football League to show a game in October on the Yahoo service. Mayer said she would like to work with the NFL more in the future.
For more, read this QuickTake: China's E-commerce Giant
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