Yahoo's Board Must Act Quick, Bob Peck Says

• Yahoo! Inc. YHOO shares declined 18.63 percent over the past six months, to a drop to a low of $26.76 on February 11.
• Robert S. Peck of SunTrust Robinson Humphrey has maintained a Buy rating on the company, with a price target of $40.
• The Information reported on February 17 that time and user data for the company’s three main verticals had significantly deteriorated.

Analyst Robert Peck mentioned that there have also been media reports regarding Yahoo not having been “as engaged in indications of interest from prospective buyers of the Core.”

If this is true, “the combination sets a cautionary path for YHOO as executives continue to leave, user metrics decline, and buyers are possibly eschewed,” the SunTrust report said.

Peck expressed confidence that the board would continue to fulfill its fiduciary duty and react in a timely manner to buyer interest in order to maximize the value of the Core business.

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Peck believes that meaningful interest has been expressed in the core by more than 20 potential strategic and financial buyers. However, some of these companies have also mentioned “a lack of engagement and process” by Yahoo, which has made them question the seriousness of management in finding strategic alternatives.

“If current management is being less than helpful, we would expect the independent directors on the board to facilitate robust communication and due diligence through their bankers to maximize shareholder value,” Peck stated.