The American multinational digital corporation, Yahoo, has decided to buy back its shares. Yahoo news stated that the internet company announced its purchase of shares worth $200,000,000.This buyback plan would be funded by the sale of AliBaba shares. It is anticipated that this buyback program would play an important role in ensuring that the cash is returned to shareholders. The company has already purchased back its stock worth $970,000,000 since 2012.
The buyback plans of the digital giant are expected to play an important role in strengthening Mayer’s stance against investor, Starboard Value LP, who took a stance in Yahoo last year. It argued that the Chief Executive Officer had lowered the value of investors by heavily spending on acquisitions. The investor discussed some of his issues in a letter to the Chief Executive earlier this month. In that letter, he requested the corporation to lower its costs and purchase back its shares worth $400,000,000.
The final day for the submission of nominees for the board of Yahoo is Friday. The decision regarding the change of the board has yet to be made by the activist. Starboard has raised issues against Ms. Mayer in the span of more than two years since she became an investor in the corporation. During that period, it failed to launch itself in the competitive social networking and the mobile computing world as it was unable to increase its advertising revenue.
The re buying of the shares reduced the amount that Ms. Mayer could disburse on huge acquisitions. Last year, she disbursed more than $800,000,000 to purchase firms such as BrightRoll, which deals in mobile advertisements analytics and video advertisement service. These huge acquisitions are enough to support the arguments made by Starboard. The buyback program would play a significant role in increasing the share price of the internet corporation, as the share purchase would reduce the supply of the available shares.
Yahoo news today eported that a huge part of the market value of business has been tied up to its ownership of the shares of the Chinese electronic commerce site, Alibaba, that had the largest IPO in the United States of America. The corporation has sold $940,000,000 worth of shares of the China-based giant. Yahoo breaking news speculated that the corporation still owns 15% of the total shares of the Chinese company. The corporation is expected to sell those owned shares of the e-commerce site soon. The decision will play an important role in reducing the market value of the company. Now it has yet to be seen that to what extent the buyback plan is able to increase the stock price of the internet corporation.
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