YHOO Tumbles After BABA Spinoff Faces IRS Uncertainty

Around 1537ET YHOO shares began a flash-crash-like free-fall with ascending volume on an accelerating plunge in price. BABA did not snap until 1544ET when it cracked lower and the arbs desparately tried to keep the two firms tied together somehow.

Initial chatter was import tariff news from China (which may have explained the huge divergence between the two) but soon after Bloomberg reported that the U.S. Internal Revenue Service is considering a rule change that might complicate YHOO efforts to exit its BAB stake 'efficiently'.

As Bloomberg explained, that could have an impact of Yahoo’s plans to hold a tax-free spinoff of its shares in Alibaba, a plan that Yahoo unveiled in January as it seeks to maximize the return of cash to shareholders.

The potential change would affect the IRS’s rules for spinoffs of trades or businesses that are small compared with a company’s other assets.

and it was clear that the arb between YHOO and BABA was breaking down...

The deal is a critical step for Chief Executive Officer Marissa Mayer, who came under pressure from Starboard Value LP and other investors to return cash to shareholders, find ways to cut taxes and avoid major acquisitions. The Asian assets, including a stake in Yahoo Japan Corp., have supported Yahoo’s value and given Mayer, who became CEO in 2012, cover from shareholder pressure as she worked to turn around Yahoo.

Isaac Zimbalist, senior technician reviewer at the IRS’s Office of Associate Chief Counsel (Corporate), said on Tuesday the government agency is considering changes to rules concerning spinoffs. The IRS will hold in abeyance any ruling requests received starting today as the issue is studied, Zimbalist said at a D.C. Bar Association event.

Ruling requests already received by the IRS will continue to move forward, but that is subject to change.

“The issue comes down to whether we’ve dropped a hot dog stand or a lemonade stand into a business that is primarily publicly traded stocks, cash and other wonderful things that I call appreciated property,” Zimbalist said.

Yahoo’s plan is to put Yahoo’s holding in Alibaba into a newly registered firm called SpinCo, which will own all of Yahoo’s 384 million Alibaba shares that were valued at $40 billion at the time, as well as a smaller, ancillary legacy business. Shares in SpinCo will then be distributed to existing Yahoo shareholders as a separate public company, according to the plan.

*  *  *

Good job they paid Marissa Meyer the big bonus already

Comments

[Panic Mode]

Who cares about Yahoo. The company has no substance.

[Divine Wind]

I have a brother who works for Yahoo.

I can see the fear in his eyes.

[SafelyGraze]

tylers --

this would be a great time to grant IMAGE POSTING capability for the SafelyGraze account

http://luxeco.qiniudn.com/wp-content/uploads/2013/08/Vogue-Marissa-Mayer...

hugs,
hedgelessHorseman

[B2u]

Yahoo?  Going the way of MySpace...

[Rainman]

SpinCo ... that funny or what ?

[Bay of Pigs]

Yahoo articles are some the worst propaganda on the entire internet, and that's saying something.

Stooge Central...

[knukles]

Oh come on, HuffPost is their High End Intellectual stuff .....
                         (feeling nauseous)

[Mat Cauthon]

There was a time back in October and Novemeber of last year where Yahoo was picking up my Examiner Finance articles, with some of them even making their front landing page.

But since they didn't speak upon Bruce Jenner's trans-genderism or how the market is in full recovery that only lasted for a short blip in time. 

Dovie'andi se tovya sagain (It's time to toss the dice)

Got Karatbars?

[Bell's 2 hearted]

speaking of King Dollar ... this gem from today's walmart earnings call (and coupled with scheduled wage increases for employees H2??)

"In addition to the impact from these two significant investments, we expect 

currency to remain a significant headwind for the year. Assuming exchange rates 

remain where they are today, the impact on full year net sales would be 

approximately $14 billion. Now, this compares to our guidance in February of 

approximately $10 billion. Again, assuming exchange rates remain where they are 

today, the impact on our earnings per share this year would be approximately 

$0.13 per share, compared to our prior guidance of $0.10 per share."

http://walmart.q4web.com/files/doc_financials/2016/Q1/Management-Earning...

[bigrooster]

This is one phone call and campaign contribution away from being undone.

[pragmatic hobo]

shoulda sold it at $300B market cap ...

[gagasonnoni]

JOIN THE GREAT ILLUMINATI A Secret "ILLUMINATI ELITE" Society of Millionaires Are Making Much money, fame and power and They Want New members... Your Access Is Only Open For A life Time... "The Clock Is Ticking..." Are You In or Out? This has never happened before, and mark my word... it will NEVER happen again. Call it "sheep & Shepard" or Call it "hunter & prey" Call it whatever you want. The money ALWAYS flows TOWARDS Illuminati members... And AWAY from NON Illuminati members... And that's what we see happen every day As you will soon see... One of the rules of the Illuminati is "We don't talk about the Illuminati" so I can't say too much about it here. If you are truly interested in becoming a member contact;([e-mail]) REMEMBER NO GOING BACK..ENJOY THE GREAT ILLUMINATI LIFE!!!!

[Mat Cauthon]

And don't forget to LIKE their facebook page.  :P

Dovie'andi se tovya sagain (It's time to toss the dice)

Got Karatbars?

[BlueStreet]

Logged into an old Yahoo email account yesterday for first time in a year or so, promptly logged out. Good job MM, you're doing a hell of a job. 

[Budnacho]

Yahoo is the last-bastion of free online discourse for the independent thinker....

By "independent" I mean "Retarded"..............

[Mat Cauthon]

Funny how the clowns on CNBS yesterday were saying that EBAY wont tank when they spin off PayPal.

Dont fight the Algo's... peeps will lose everytime.

Dovie'andi se tovya sagain (It's time to toss the dice)

Got Karatbars?

[Larry Dallas]

Marissa Meyer has to be the worst CEO. YHOO has been only going due to the tech momentum the past few years.

Tumblr has probably already been written off at the epxense of shareholders equity, but Meyer got paid and got to be the quintessential role model for feminists to "have it all".  

[pitterrier]

Lean in first, bend over next.

[Make_Mine_A_Double]

Yahoo itself is worthless - only value is in BABA whom will buttfuck(s) Marissa (again and again) to devalue YaYas holdings.

Other than that Yahoo Japan has value - but the organic Yahoo USSA is a turd on a stick.

[Chuck Knoblauch]

Looking forward to Y's demise.