Yahoo stock jumps 6% after report says it’s considering sale of core business

Shares of Yahoo Inc. jumped Wednesday morning after a news report that the company’s board was meeting this week to consider selling off its core business.

The Sunnyvale, Calif.-based company’s stock climbed $2.05, or 6%, to $35.76 in early trading.

On Tuesday, the Wall Street Journal reported that Yahoo’s board was likely to discuss whether the company should continue its plan to spin off its 15% stake in Chinese e-commerce juggernaut Alibaba, sell its core Internet business, or both.

SIGN UP for the free California Inc. business newsletter >>

A Yahoo spokeswoman declined to comment.

Yahoo’s core business includes properties such as Yahoo Mail and Yahoo News. The company has struggled to boost its advertising revenue and was late to adapt to mobile technology and video advertising, though company Chief Executive Marissa Mayer has tried to increase growth in those areas.

In January, the company said it would spin off its nearly $40-billion stake in Alibaba, the Chinese Internet giant. Its entire Alibaba investment would be placed in a separate, publicly traded company called SpinCo.
All of Yahoo’s 384 million Alibaba shares will be transferred tax-free to the new company, saving it billions in taxes that would have been due had it sold the shares on the open market.

But the move wouldn’t add money to the beleaguered Sunnyvale, Calif., company’s coffers -- or mask its continued problems with its core business.

Last month, New York-based activist investor Starboard urged Yahoo to abandon the plan and sell its Internet search and advertising business instead, citing executives’ inability to turn it around.
For more business news, follow @smasunaga

ALSO

Zuckerbergs to give 99% of their Facebook shares to charity

L.A. motorists are paying 75 cents more than U.S. average for a gallon of gas

Private-sector job growth accelerated to 217,000 in November, ADP says