Yahoo CEO Marissa Mayer has been at this for a while. In January, she announced plans to spin off Yahoo's Alibaba shares into a separate company, subsequently dubbed Aabaco. The publicly-traded Yahoo will retain the core business.
As we all know by now, investors ascribe very little value to any of that other stuff. Yahoo's market cap, including its Alibaba stake, is $29 billion.
Now that the SEC has decided to not decide, the direction Yahoo takes is up to the board and its law firm, Skadden, Arps, Slate, Meagher & Flom.
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"Work proceeds on the pending Aabaco spin-off plan," the Sunnyvale, California-based company said in the filing. Company representatives didn't respond to requests for comment.
It's not like investors have been wildly excited about their prospects headed into this week. Yahoo shares have tumbled 39 percent this year, badly underperforming the S&P 500, which has dropped 4.4 percent. Much of that is reflective of a 41 percent plunge in Alibaba shares.
Robert Peck, an analyst at SunTrust Robinson Humphrey, wrote in a report last month that the market "has already baked in the worst case" for Yahoo and assumed a 40 percent tax on the Alibaba stake. A fortuitous tax-free spinoff would value the stock at $48, Peck wrote.
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In a note after Tuesday's filing, CRT Research analyst Robert Coolbrith echoed that sentiment. The bullish case, according to Coolbrith, is that the size of the Yahoo deal shouldn't be of grave concern to regulators and that recent history favors the company.
Most notably, just last year John Malone's Liberty Interactive spun out an entity called LIberty TripAdvisor Holdings, consisting of stock in TripAdvisor and BuySeasons.
"We believe that YHOO has both relevant tax law and precedent transactions on its side," Coolbrith wrote. He has a "buy" rating and $52 price target.