Yahoo! on Friday fended off a shareholder salvo against Chief Executive Marissa Mayer, promising that she and the company’s board will deliver “sustainable shareholder value.”
The salvo was launched toward the struggling tech giant late Thursday in the form of a letter from hedge fund Canyon Capital Advisors, which demanded that Yahoo! “prioritize a sale of its core business, a portion of its assets, or the entire company.
“In the meantime, we believe the board must explicitly and publicly commit to preserve the company’s most easily valued asset — its cash,” Canyon added in the letter, a copy of which was obtained by The Post.
Yahoo!, in a statement, said it plans to do just that.
“Our board and management team have been and remain firmly committed to acting as good stewards of capital and delivering sustainable shareholder value,” Yahoo! said in the statement. “We will share details on our future plans for Yahoo! on our upcoming earnings call.”
Los Angeles-based Canyon noted in its letter that Yahoo! has spent more than $3 billion on acquisitions, which, based on the company’s stock price, have been getting “absolutely no (or negative) value” from Wall Street.
Canyon referred to the fact that Yahoo’s 15 percent stake in Chinese Web giant Alibaba, valued at $25.7 billion as of Friday, plus its $8 billion stake in Yahoo Japan and $5.9 billion in cash, well exceeds Yahoo’s market cap of $27.5 billion. That implies a negative value for Yahoo’s core Internet businesses.
Canyon, a Top 15 investor in Yahoo!, griped in its letter that management has given “no substantive response” to concerns raised by shareholders.
Those include hedge fund Starboard Value LP, which last week explicitly threatened a proxy battle as it demanded Mayer’s ouster as CEO.
The hedge fund cited recent reports of plans for fresh hires and spending, even as Yahoo! plans to lay off 10 percent of its workforce.
Yahoo!, once a dominant Internet player, has suffered in recent years because it was late to mobile and because its power base, display ads, has seen money shift away to other types of ads.
It was hoped Mayer, brought aboard in 2012 from Google, would resuscitate the company, but the rebound has yet to happen — trying the patience of shareholders.
“Many misperceptions and mischaracterizations of Yahoo!, fostered by third-hand reports, are accepted as fact in this letter,” Yahoo said.