Yahoo may have hit a low point last week when it announced that chief executive Scott Thompson had left the company after just five months after questions were raised about his academic record.
But the company is wasting no time in trying to turn around its fortunes, announcing Sunday that it had finally closed a long-rumored deal for its stake in the Chinese Web company Alibaba. Yahoo said the agreement included selling a 20 percent share of its stake in Alibaba, worth about $7.1 billion, according to a company news release.
Sealing the deal with Alibaba had been a top priority for Daniel Loeb, the activist investor who first raised questions about Thompson’s academic record. Loeb and two others nominated by his hedge fund, Third Point, were appointed to Yahoo’s board of directors after Thompson’s departure.
Analysts said the deal with Alibaba was an aggressive way to push the company forward and move on from its executive’s troubles..
In a note to investors, BCG’s Collin Gillis upgraded Yahoo from “Buy” to “Hold,” saying that believes the new board will be good for the company.
“We see the new board as increasing the focus on Yahoo’s core media business and limiting the potential for large dilutive acquisitions,” he said.
Next up, Gillis said that he is looking to see Yahoo monetize its stake in Yahoo Japan.
The announcement and Yahoo’s dogged pursuit of a turnaround could suggest that interim CEO Ross Levinsohn is primed for the top job, but Forbes notes that it’s much too soon to be popping champagne corks for the ad veteran.
Ronald Josey, an analyst with ThinkEquity in New York, told the publication, “Levinsohn has the right credentials for the job, but it’s still early, and I think Yahoo knows that.”
After all, Levinsohn has been on the job for only about a week.
Yahoo was trading up just over 1 percent Monday, at $15.60 per share near closing bell.