Is Yahoo! Inc. (YHOO) About to Sell Their Internet Assets to Softbank?


Yesterday it was reported that the board of directors at Yahoo! Inc. (NASDAQ:YHOO) are discussing the possibility of breaking the company up, and perhaps selling off its core internet assets. This move would be the result of the fact that currently the pieces of the company seem to be valued at greater than the full entity. This morning the Wall Street Journal indcated that the Japanese-based Softbank Group Corp. may in fact be a possible suitor for these internet assets.

Softbank, who already is the largest shareholder of Yahoo Japan, seems like the perfect fit, as they look to expand outside of Japan into a broader market. Yahoo currently owns a stake in Alibaba and Yahoo Japan, worth an estimated $40.5 billion. The Current market cap of Yahoo! Inc. (NASDAQ:YHOO) is just shy of $32 billion, making it greatly undervalued even if it’s internet assets were worth nothing. We will continue to follow this story as it breaks.

The stock closed at $33.71 during the last trading session. It is down 22.11% since April 29, 2015 and is downtrending. It has underperformed the S&P500 by 21.91%.

From a total of 23 analysts covering Yahoo! Inc. (NASDAQ:YHOO) stock, 16 rate it a “Buy”, 0 a “Sell”, and 7 a “Hold”. This means that 70% of the ratings are positive. The highest target price is $62 while the lowest target price is $32. The mean of all analyst targets is $42.45 which is 25.93% above today’s ($33.71) stock price. Yahoo! Inc. was the topic of 55 analyst reports since July 22, 2015 according to the firm StockzIntelligence Inc. Oppenheimer maintained shares on October 21 with a “Outperform” rating. RBC Capital Markets maintained shares with a”Sector Perform” rating and a $42 target share price in their report from an October 21. Cowen & Co maintained YHOO stock in a recent report from October 21 with a “Market Perform” rating. Morgan Stanley maintained the rating on October 21. Morgan Stanley has a “Overweight” rating and a $49 price target on shares. Finally, Jefferies maintained the stock with a “Buy” rating in a report they issued on an October 21.

The institutional sentiment decreased to 1.03 in Q2 2015. It’s down 0.01, from 1.04 in 2015Q1. The ratio dropped, as 92 funds sold all their Yahoo! Inc. shares they owned while 232 reduced their positions. 83 funds bought stakes while 251 increased their total positions. Institutions now own 635.68 million shares which is 1.40% less than the previous share count of 644.72 million in 2015Q1.

Indaba Capital Management L.P. holds 27.75% of its total portfolio in Yahoo! Inc., equating to 1.69 million shares. Owl Creek Asset Management L.P. owns 10.70 million shares representing 22.57% of their total US portfolio. Moreover, Stonehill Capital Management Llc has 21.86% of their total portfolio invested in the company, equating to 1.33 million shares. The United Kingdom-based Davide Leone & Partners Investment Co Llp has a total of 12.48% of their portfolio invested in the stock. Courage Capital Management Llc, a Tennessee-based fund reported 550,000 shares owned.

Yahoo! Inc. is a technology company