Yahoo's Latest Game plan Ripped by Canyon Capital

Yahoo Shares - Less than a week after Yahoo scrapped plans to spin off its Alibaba stake and instead explore a reverse spinoff of its core Internet business and certain other assets, some of its major stockholders are voicing objections. 

 

 Canyon Capital fired off a letter Friday evening to the company's management arguing that Yahoo's new potential restructuring plan, which was revealed late Tuesday, lacked "any clear details in terms of analysis, process, or timing." The Sunnyvale, California, money manager, with $24 billion in assets under management, holds a stake of about 10 million shares and is one of Yahoo's larger hedge fund investors.
 

A reverse spinoff of the core business plus its cash and Yahoo Japan stake, which is the notion now under consideration, "would be … fraught with operational, tax and execution risks similar to those that ultimately caused it to abandon the Alibaba spin," the Canyon letter said.
 

A defense by CEO Marissa Mayer clearly failed to convince some investors that a possible sale of the core business would be a better move. At least one other fund, SpringOwl Asset Management, was also criticizing the Yahoo restructuring.
 

In a 99-page presentation published this month, officials at that hedge fund proposed job cuts and new management, among other steps, arguing that Mayer had frittered away some $10 billion on failed acquisitions and stock buybacks. "It's been a poor record," managing director Eric Jackson