Why Yahoo Is Not A Takeover Target

Ever since Yahoo! Inc. YHOO announced it was spinning off its stake in Alibaba Group Holding Ltd BABA into a separate entity, there has been speculation from some quarters about whether Yahoo is preparing itself for being bought. However, Kara Swisher, Re/code co-executive editor, doesn’t think that’s a possibility...at least for now.

Swisher was on CNBC discussing why Yahoo is not a takeover target.

Is Yahoo A Takeover Target?

"No, not right now it isn't at least," Swisher said. "I mean, there are certainly possibility in which they could sell it themselves or somehow trade it into a bigger company, but at this point the idea that someone could just swoop in is almost impossible. First of all, it's not going to happen until the fall, which is a long time and it could go on after that. This is really a super complex transaction."

She continued, "The second thing is they have this big chunk of Yahoo! Japan, which is problematic. Whoever is going to takeover this company will want to own a lot of Yahoo! Japan. I think they have 25 percent stake worth $7 billion. And the other part is fixing the core business. It's a very thorny problem that Marissa Mayer has made a big bet that she can do alone and so there are all kinds of different thorns in this idea of just picking it up like it's some easy target."

Doesn’t Market Considers Yahoo’s Core Business Valueless?

"When they spinoff, it will have a value. I mean they do have all that cash, they have got an incredibly strong free cash-flow. There are all kinds of assets there that are very valuable especially compared to some other companies and so it's not going to be valueless. It's just that right now with those with it, it is, but there will be a value for it once it spins off," Swisher said.