Yahoo! Inc. (NASDAQ:YHOO) shares were up 1.36% to $39.38 on Friday after the company’s Board agreed to sell its core internet operations and land holdings to Verizon. The company has a market cap of $37.92 billion at 948.25 million shares outstanding. Shares have been trading in a 52-week range of $26.15 to $39.58.
In its latest earnings report, Yahoo! Inc. missed market expectations for profits, with revenue sliding 19% compared to the same quarter a year ago. The company reported earnings per share of $0.09 on revenue of $842 million, lower than analysts’ expectations of earnings of $0.10 per share but higher than revenue expectations of $836 million.
Components of the report showed a 26% increase in revenue for mobile, video, native, and social (MaVeNS) to $504 million while search revenue dropped 13%. Yahoo! Inc. projects revenues at $840 million to $880 million, ahead of the $853 million consensus, and has full-year estimates between $3.4 billion and $3.6 billion for revenue.
So far, Yahoo! Inc. board members have not been authorized to discuss the terms of the deal until the official announcement to be made today. After the sale to Verizon, shareholders will be left with around $41 billion in investments in Alibaba, along with Yahoo! Japan and a small portfolio of patents.
Chief executive Marissa Mayer is not expected to join Verizon but is set to receive a $57 million severance payout. Verizon plans to combine these assets with AOL, which is a long-time competitor of Yahoo! Inc. that Verizon already acquired last year. Their plans include leveraging Yahoo’s content and advertising technology to offer more robust services to Verizon clients.
Yahoo! Inc. is a company that focuses on digital information discovery informing, connecting and entertaining its users with its search engine, communications, including Yahoo Mail and Yahoo Messenger, and digital content products, including Tumblr, and its four verticals, such as Yahoo News, Yahoo Sports, Yahoo Finance and Yahoo Lifestyle.
DISCLAIMER: There is a substantial risk of loss with any speculative asset, especially small cap stocks. The opinions expressed are those of the author, and do not constitute recommendations to buy or sell a stock. Do your own research before committing capital.
