Yahoo's board is reportedly deciding whether to sell its core Internet business, spin-off its stake in the Chinese e-commerce giant Alibaba, or both. The deliberations come amid broader debate about Yahoo's future.
Come Friday, board members at Yahoo could have a plan for what to do about the beleaguered company's declining stock value.
That plan could involve the creation of a holding company for Yahoo's estimated $30-billion (28.2 billion-euro) stake in Alibaba, or it could see the Internet giant auction its popular Yahoo Mail, news, search and sports websites to the highest bidder.
According to multiple media reports that cited people familiar with the matter, a hedge fund with a stake in Yahoo is pushing for the Internet giant to drop its plans to spin-off its stake in Alibaba into an entity called Aabaco Holdings, because that could prove costly for investors.
The Alibaba spinoff "is not Yahoo's best alternative," the hedge fund, called Starboard Value, wrote in a letter to Yahoo's board members. It said the transfer of shares might prove costly to investors because authorities in the US had not granted the deal tax-free status.
Starboard said that even if Yahoo were to split off its Alibaba shares, the company's remaining Internet services would still have little or no value.
Shares in Yahoo jumped more than 7 percent in extended trading on Tuesday following reports that board members were holding marathon meetings this week to decide on a course of action.
The jump reflected investors' yearning for a radical change of course at the Sunnyvale, Calif.-based tech giant.
cjc/uhe (AFP, Reuters, dpa)