February 14, 2012, 3:25 PM — Another great day for Yahoo shareholders.
According to All Things Digital, talks between the Internet pioneer and Asian partners over a deal that would have saved Yahoo more than $4 billion in U.S. taxes have ended abruptly with no resolution.
The news sent shares of Yahoo (NASDAQ: YHOO) down nearly 6% to 14.92 shortly after 1 p.m. Tuesday.
Yahoo owns about 40% of Alibaba Group and 33% of Yahoo Japan. It's trying to free up capital from these $17 billion worth of investments without getting hammered on taxes.
Discussions between Yahoo, Alibaba and Softbank -- which has a controlling interest in Alibaba and a 40% stake in Yahoo Japan -- have been ongoing for months now, though they've been halted before. One of Kara Swisher's unnamed sources blames Yahoo for "suddenly shifting course on what they want from the arrangement," while others said Yahoo really and truly wants a deal.
What I don't understand is why there are negotiations in the first place. Yahoo's CEO is an outsider who's been on the job for less than two months. Let's face it; Scott Thompson is still learning about Yahoo's business.
Meanwhile, half the directors are lame ducks. So you have a new CEO and four directors who aren't going to be around to experience the outcome of the deal. How many shareholders would be comfortable with that group signing off on a multibillion-dollar transaction?
Of course, maybe it's better than passing the decision off to new directors, who likely would be coming into the situation relatively uninformed.
Which at least makes them qualified to sit on the Yahoo board.