With criticism on the sales process, is Yahoo again in jeopardy?
Yahoo Inc. recently made an announcement pertaining to a rather mysterious sales process. This sales process caused various tech giant to raise their eyebrows such as AT&T, Comcast, Time, and Verizon Communication along with other major equity firms present on this planet. However, as per the recent details, all those who wanted to bid for the company seem to be rather hesitant when it comes to signing the Non-Disclosure Agreement (NDA) by Yahoo.
As per the CTFN, bidders are relatively okay with the terms prescribed by the NDA and consider it to be an “uncharacteristically long document.” Basically, an NDA is signed amongst firms when the financial documents are unveiled. This merely happens when an acquisition is taking place. However, as per the extremely long document drafted by Yahoo did not encompass any information related to the private financial information.
Yahoo has established a unanimous committee to offer strategic alternatives for the firm. The committee has now taken Goldman Sachs & Co., JP Morgan, and PJT Partners Inc. to be the firms official financial advisors so that the bidding process can initiate. However, the company now needs to secure its future, Marissa Mayer, the CEO of the company has also recruited a veteran technology banker namely Frank Quattrone to go through the potential bids. For the aforementioned sales auction, the company has also recruited Moore LLP & Cravath Swaine.
When the announcement surfaced of the sales process, many analysts and investors were skeptical about it since they questioned the loyalty of the sale mechanism. These individuals accused the company for make using of the sale process as a tool to delay the proposed turnaround strategy by Marissa Mayer. This majorly talks about laying off employees and theb making massive investments in the mobile ecosystem.
This is not it but the Chief Financial Offer of YHOO, Mr. Ken Goldman has also highlighted the fact that the company is seeking a quick sales process of the non-core assets. This further ignited the conspiracy since people have started to question the sincerity of the company to its online search business and the bidding plans.
An NDA which is rather ambiguous is not doing quite well to the sales process in general. This is particularly relevant by taking the popular proxy that took place with the activist investor group, Starboard Value LP into consideration. Irrespective of the negativity surrounding the company, Yahoo stocks have been trading in green recently which have increased by 1% posing to be a relatively good sign. However, there is a lot of pessimism pertaining to the company when it comes to the sales process which is going to hurt the investor’s sentiments as perceived.
Hence in a nutshell, Yahoo at this point has embraced a crucial point where its sales process is in jeopardy. The company needs to play it safe at this point of time as they cannot really afford any more damage whatsoever. It won’t be wrong to say that it is a do or die situation for them.
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