UPDATE: Bank of America Downgrades Yahoo! to Neutral on Restructuring Plan Changes
Bank of America reduced its rating on Yahoo! (NASDAQ: YHOO) from Buy to Neutral and lowered its price target from $18 to $17 a share.
Bank of America said, "After the close, Yahoo announced (in an 8k) that a review by new CEO Marissa Mayer “may” change previously announced restructuring plans and plans for returning substantially all after-tax cash proceeds from an Alibaba sale to shareholders. We think this is a clear signal that Yahoo is likely to: 1) invest in the business and 2) make material acquisitions and, while this strategy may make sense for those with a 3-5 year time frame (like the CEO), the strategy could disappoint a portion of the shareholder base. We had thought a more shareholder-friendly board would ensure all cash would be returned, and think it is unlikely this new 8K would be filed without Yahoo board's knowledge and approval."
Yahoo closed at $16.01 on Thursday.
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