Robert "Bob" S. Peck of SunTrust Robinson Humphrey maintains a Hold rating on the company with a price target of $42.
Peck mentioned that in an interview, Verizon General Counsel stated they have “reasonable basis to believe right now that the impact is material and we're looking to Yahoo to demonstrate to us the full impact. If they believe that it's not then they'll need to show us that.”
The analyst believes this statement increases the uncertainty regarding the monetization of assets, while highlighting 10 questions investors would like Yahoo to answer.
- Peck believes that the first question would be: “Can VZ invoke the MAC on the hacking and surveillance issues - particularly if engagement metrics have been steady post the disclosure per Yahoo - and leverage that to either negotiate the price down or walk away?”
- If Verizon does try to do so, could Yahoo sue to enforce the agreement in its entirety?
- If the deal falls through, would Yahoo once again open up the bidding process to other potential acquirers?
- “If the current core sale plan unravels, how close are we to completing the process on the reverse spin of the Core?”
- What progress has been made in the process of monetizing the Yahoo Japan investment, which management had stated could be done simultaneously?
- What conditions would Yahoo need to fulfill to be able to file the proxy?
- “When does the window to return capital to shareholders open up?”
- Will there be any narrowing of the closing window that had earlier been stated as Q1:17?
- When can investors expect greater clarity on governance issues following the Core sale?
At last check in Wednesday's pre-market, Yahoo was up 1.06 percent at $42.12.
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|Oct 2016||MKM Partners||Maintains||Buy|
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