While it’s been a merry-go-round of sorts for Yahoo! Inc. (NASDAQ:YHOO) as of late, as activists, the board and investors all have varying opinions on what the company should or should not do with their Alibaba stake and core business holdings, today we get word that clarity may be about to emerge.
While the board of directors had been brushing off any idea of selling the company’s core business, instead opting to keep it intact or spinning it off, pressure by activist investors may be pushing the company to reconsider their options. While Yahoo’s (NASDAQ:YHOO) stake in Alibaba and Yahoo Japan are worth approximately $35.7 billion, and they have approximately $5.88 billion is cash and cash equivalents, the current market cap of the company including these assets and their core business assets is only around $28.5 billion at the current share price.
Analysts believe that Yahoo’s core business could be worth between $6 and $8 billion alone, and numerous firms appear interested, including Verizon (VZ), who has shown quite a bit of interest. It will be interesting to see what happens next as activists push for a sale. The stock is currently trading higher by 3.18% or $0.96 following the positive news, hitting $31.12 per share at the time of us publishing this article. About 15.55 million shares traded hands. YHOO has declined 29.66% since June 4, 2015 and is downtrending. It has underperformed the S&P500 by 24.97%.
From a total of 25 analysts covering Yahoo! Inc. (NASDAQ:YHOO) stock, 16 rate it a “Buy”, 0 a “Sell”, and 9 a “Hold”. This means that 64% 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 $42.71 which is 37.24% above today’s ($31.12) stock price. Yahoo! Inc. was the topic of 59 analyst reports since July 22, 2015 according to the firm StockzIntelligence Inc. SunTrust maintained shares on December 10 with a “Buy” rating. Cowen & Co maintained shares with a”Market Perform” rating and a $35 target share price in their report from an October 21. FBR Capital maintained YHOO stock in a recent report from December 9 with a “Outperform” rating. RBC Capital Markets maintained the rating on October 21. RBC Capital Markets has a “Sector Perform” rating and a $42 price target on shares. Finally, Oppenheimer maintained the stock with a “Outperform” rating in a report they issued on an October 21.
The institutional sentiment decreased to 0.8 in Q2 2015. It’s down 0.23, from 1.03 in 2015Q2. The ratio turned negative, as 113 funds sold all their Yahoo! Inc. shares they owned while 235 reduced their positions. 60 funds bought stakes while 220 increased their total positions. Institutions now own 619.16 million shares which is 2.60% less than the previous share count of 635.68 million in 2015Q2.
Stonehill Capital Management Llc holds 60.89% of its total portfolio in Yahoo! Inc., equating to 5.71 million shares. Zenit Asset Management Ab owns 4.42 million shares representing 22.25% of their total US portfolio. Moreover, Indaba Capital Management L.P. has 21.81% of their total portfolio invested in the company, equating to 2.31 million shares. The United Kingdom-based Davide Leone & Partners Investment Co Llp has a total of 17.99% of their portfolio invested in the stock. Owl Creek Asset Management L.P., a New York-based fund reported 9.97 million shares owned.
Yahoo! Inc. is a technology company