Friday, 21 November 2014

Tough call for Yahoo! Inc.

Ms. Marisa Mayer is in a crucial situation now where she is left in a dilemma to make a fairly tough call. The extracts of the decision is that will she would give up on her own plans to cater to the stakeholders need. 
According to a report by Bloomberg, Ms. Mayers is in a tough situation where she has to decide if she wants to give the shareholders at YHOO higher value or run the massive business on her own. Whatever decision she makes, she has to let go of one thing or the other. YHOO currently plans to sale out its remaining stakes to the Chinese Ecommerce giant Alibaba. The issue the company is facing currently is that if it chooses to sell out then they would be liable to pay tax deductions which are expected to compound to 35 percent. In general if it agrees to do so them the company will be liable to the government an amount of 15 billion dollars out of their total net worth of 44 billion dollars.
Mayer currently plans to opt for something that can result in a tax free arrangement. One way deduced is that she spins off YHOO holdings in Alibaba to a separate company. This will result in offering the remaining value to the shareholders at Yahoo. This option that does not seem quite possible at this stage since it would require Mayer to lead the company almost a quarter of YHOO’s size.
The issue remains to be a mystery since no such comment has been received from authorities regarding the matter. Although it is expected that Ms. Mayer would soon stand steadfast regarding her plans about the divestiture.  Ms. Mayer is most likely to address other issues regarding the company soon when she addresses the masses.  In a conference call held recently by Mrs. Mayer  stated that, the company has hired  top notch tax experts that would help them to come out of the mess they are currently into. The company needs to come up front and state what they really expect and what they plan to do.

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