Activists investors at Starboard Value have been outspoken about how Yahoo! Inc. YHOO CEO Marissa Mayer has managed the company. Though they are supportive of the tax-free spinoff of Alibaba Group Holding Ltd BABA, the investors released another scathing letter that chides the Board for not being willing to "take aggressive action to improve the Core Search and Display Advertising Business." Starboard pointed to this as the main reason that Yahoo trades below a sum-of-the-parts analysis.
In its letter, Starboard advocated that Yahoo authorize $3.5-4 billion in share repurchases, while also separating Yahoo Japan in a tax-efficient manner. In addition, Yahoo should right size the company's "bloated cost structure" and explore opportunities to monetize intellectual property and real estate assets.
Starboard estimated that Yahoo could unlock $11 billion in valuation, or approximately $11.70 per share.
Shares of Yahoo traded recently at $43.07, down 0.85 percent on the day. Shares are lower by 14 percent this year as Alibaba shares have lost 20 percent.
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