×
Pro Analysis

Tech investor Meeks: 'If Yahoo's double whammy doesn't kill this merger, I don't know what will'

A pedestrian street crossing sign stands at Yahoo headquarters in Sunnyvale, California.
Noah Berger | Bloomberg | Getty Images
A pedestrian street crossing sign stands at Yahoo headquarters in Sunnyvale, California.

Speculation that Verizon, which offered $4.83 billion in July for Yahoo's legacy advertising businesses and net cash, would leave the beleaguered company at the altar might be well founded.

Verizon already had been squeamish about the merger after Yahoo's September admission of a data breach. Even though the violation had occurred years before it was made public, Yahoo deserved to be shamed.

The lingering questions were 1) When did Yahoo recognize its privacy catastrophe? and 2) Did CEO Marissa Mayer and her team know about the hack when they were shopping Yahoo? A net breach of that magnitude was bad enough. Hiding it perhaps was a mortal sin.

Since Yahoo's initial revelation, Verizon had been waiting for more data from Yahoo about its hack. Most Wall Street analysts, however, had concluded that the breach wasn't a deal breaker. It may not even have forced Yahoo to accept a discount to Verizon's substantial offer.

That changed on Thursday, after Yahoo revealed that another billion records could've been compromised. Again, how could Yahoo have let this happen? Why did it take so long to detect the fraud? Were Yahoo's leaders potentially deceiving Verizon once again? This is all a horrific deja vu.

Fool me once, shame on you; fool me twice, shame on me. If Yahoo's double whammy doesn't kill this merger, I don't know what will. I'm surprised that several analysts are urging Verizon to take a discount and close the deal.