Tech

If Yahoo gets a bid, it should take it: Analyst

If they can get a bid, Yahoo should sell themselves: Analyst
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If they can get a bid, Yahoo should sell themselves: Analyst

A top tech analyst thinks that if Yahoo gets a bid, it should sell itself.

BGC Partners senior technology analyst Colin Gillis, who has a $39 price target on the stock, told CNBC's "Squawk Alley" that the tech company should settle its affairs out of the limelight.

"Yahoo is a turnaround play that has shown very little turnaround ... the reality is this is a company that's best served being sold and turned around privately," said Gillis.

In January, activist hedge fund Starboard Value sent a letter to the company's board saying that management had failed to turn around Yahoo and that the fund had lost all confidence. Starboard Value's CEO, Jeffrey Smith, also told CNBC that the fund had been contacted by potential buyers of Yahoo's core business.

Jeffrey Smith, Starboard Value
Starboard Value's CEO contacted by potential buyers of Yahoo core biz
Yahoo CEO Marissa Mayer speaks during her keynote at the 2014 Cannes Lions, June 17, 2014, in Cannes, France.
Yahoo's business now worth less than nothing

Gillis explained that his "buy" rating on the stock is based on the sum of all of Yahoo's parts.

"The core business is worth about $6 to 8 billion and this is for a company that has a market cap of somewhere around $27 billion. So it's just a tiny fraction," he said.

Gillis added that although there's a chance Yahoo could get itself on the right track, the headline exposure isn't helping.

"It's a turnaround best done out of the public eye. ... There's room for Yahoo in the landscape, but to report every 90 days ... that may not be the path to take," said Gillis.

Twitter and Yahoo are in a strong position: AOL CEO
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Twitter and Yahoo are in a strong position: AOL CEO

AOL Chairman and CEO Tim Armstrong told CNBC's "Fast Money Halftime Report" on Tuesday that companies like Twitter and Yahoo are in a strong position, despite the slew of headlines on the companies' restructurings.

"These companies are very, very creative and very, very dynamic. ... Undeniable scale in our sector is driving undeniable results from a financial standpoint," he said.

"I want a healthy ecosystem. ... It's a competitive field. The best teams are going to win," Armstrong added.

Disclosure: CNBC has a content-sharing partnership with Yahoo's finance site.

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