Yahoo stock rises as it turns Alibaba investment into separate company

Yahoo is splitting its remaining Alibaba shares into a separate company called SpinCo. The move will help Yahoo avoid the tax pitfalls of the investment.

The news came Tuesday as Yahoo reported its fourth quarter earnings. In after hours trading, Yahoo’s stock price increased as much as seven percent. Investors clearly approve of the plan for the cash.

The presentation deck for the plan explained that part of the goal of spinning off the Alibaba investment is to provide transparency for investors into Yahoo’s core business. SpinCo will still be answerable to Yahoo shareholders. Take a look at the full deck here. This image visualizes the split:

Page 4 from the Yahoo deck on its Alibaba investment split off

Page 4 from the Yahoo deck on its Alibaba investment split off

In terms of its fourth quarter earnings, Yahoo met expectations. Here’s the numbers:


Earnings per share

On the earnings call, CEO Marissa Mayer emphasized the split between Yahoo’s core business and its new mobile, video, native, and social efforts which she deemed “MaVeNS.” She went so far as to insult Yahoo’s previously mobile efforts, prior to her arrival, calling it a “confused, web-based mobile strategy” compared to the company’s current “beautiful, native strategy.”

The MaVeNS properties brought in over a billion dollars in 2014, leading Mayer to conclude the company earned that revenue “basically from nothing in just two years.”

At the end of the call, she hinted that the company might build or acquire more messaging or communication applications because it builds on the company’s native, social and email strengths.

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This story has been updated since publishing with information from the earnings call.