WHEN: Today, Tuesday, December 8th
WHERE: CNBC's "Closing Bell"
Following is the unofficial transcript of breaking news from CNBC's David Faber. All references must be sourced to CNBC.
DAVID FABER: I WANT TO SHARE WITH PEOPLE THAT SOURCES CLOSE TO THE SITUATION INDICATE OR TELL ME THAT YAHOO'S BOARD HAS MADE A DECISION INVOLVING THAT SPINOFF OF THE STAKE IT OWNS IN ALIBABA AND THE DECISION IS NOT TO MOVE FORWARD WITH THE SAID SPINOFF OF THAT 384 MILLION SHARE STAKE IN ALIBABA. THIS OF COURSE A SPINOFF THAT YAHOO HAD BEEN PLANNING FOR FOR MANY, MANY MONTHS, ANNOUNCED EARLY LAST YEAR, WAS MOVING FORWARD WITH IT, EXPECTED IN FACT TO HAVE ACTUALLY DONE THE SPIN OF THAT STAKE INTO A NEW CO. CALLED ABACO EARLY NEXT YEAR. WHEN IT STARTED OF COURSE, IT WAS EARLY THIS YEAR. BUT THEY HAVE DECIDED AS A RESULT OF PRESSURE FROM SOME SHAREHOLDERS WHO ARE CONCERNED OF THE TAX RAMIFICATIONS OF THE SPIN, NAMELY THAT IT WOULD NOT BE CONSIDERED A TAX FREE TRANSACTION BY THE IRS AND, THEREFORE, WOULD EVENTUALLY PERHAPS BE CHALLENGED AS SUCH BY THE IRS AND TRADED A SUBSTANTIAL DISCOUNT AS A RESULT TO THE UNDERLYING SHARES OF ALIBABA. THE BOARD OF DIRECTORS, AGAIN, HAS DECIDED NOT TO MOVE AHEAD WITH THE SPINOFF OF ALIBABA. AND INSTEAD, SOURCES FAMILIAR WITH THE SITUATION TELL ME WILL EXAMINE THE PROSPECTS OF A SPIN OF YAHOO'S CORE BUSINESS. DOESN'T MEAN THEY ARE GOING TO MOVE AHEAD WITH THAT, BUT THEY ARE GOING TO EXAMINE THE PROSPECT OF A SPIN OF THE CORE BUSINESS, WHICH SOURCES TELL ME WOULD ALSO INCLUDE THE STAKE IN YAHOO JAPAN, MOST LIKELY. AND PERHAPS MOST OF THE CASH. LEAVING BEHIND, THEREFORE, THE ALIBABA STAKE. SAID ANOTHER WAY, IT'S A DIFFERENT WAY OF MAKING SURE THE ALIBABA STAKE CAN BE SEGREGATED AND LEFT IN A TAX FREE NATURE. ALL OF THIS OF COURSE DESIGNED TO RETURN VALUE TO SHAREHOLDERS WHO HAVE BEEN UPSET PERHAPS WITH THE DIRECTION OF THE COMPANY OF LATE AND THE FAILURE OF THE CORE BUSINESS TO REALLY HAVE ANY SIGNIFICANT ADVANCES ON THE REVENUE FRONT. THAT SAID, AN EXAMINATION OF THE CORE BIZ SPIN NOT TO MENTION ALL OF THE TIME IT WOULD TAKE THE COMPANY TO ACTUALLY GET THERE TO THAT END GAME CERTAINLY PERHAPS COULD BE AS MUCH AS A YEAR OR MORE. ONE HAS TO WONDER WHAT POTENTIAL DAMAGE THAT WILL BRING TO YAHOO'S BUSINESS OVERALL. BECOMES VERY DIFFICULT ONE WOULD IMAGINE TO HIRE NEW PEOPLE AND KEEP TALENTED PEOPLE WHEN YOUR COMPANY IS IN FLUX LIKE THIS. NONETHELESS THE BOARD, AGAIN KELLY, HAVING DECIDED AFTER A SERIES OF MEETINGS LATE LAST WEEK THAT WE OF COURSE WERE ALSO TELLING PEOPLE ABOUT, HAS DECIDED NOT TO MOVE AHEAD WITH THAT SPIN OF THE ALIBABA STAKE AND INSTEAD WILL EXAMINE A SO-CALLED REVERSE SPIN, IF YOU WILL, OF YAHOO'S CORE BUSINESS ALONG MOST LIKELY WITH ITS STAKE IN YAHOO JAPAN. SO A SIGNIFICANT REVERSAL FOR SOMETHING THAT FRANKLY MANAGEMENT AND THE BOARD FULLY EXPECTED NOT THAT LONG AGO THAT THEY WOULD MOVE AHEAD WITH EARLY NEXT YEAR.
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