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Yahoo Shares Spike on Report of Potential Sale

Stock jumps 5.6 percent in after-hours trading following news board of directors is meeting this week to consider selling company assets

| December 1, 2015 @ 6:25 PM
marissa mayer yahoo

Marissa Mayer

Yahoo stocks jumped in after-hours trading Tuesday following news that the company’s Board of Directors will hold a series of meetings this week to decide whether to sell the media company’s core business assets.

Shares went up 5.6 percent following the Wall Street Journal report on the possible sale, reaching $35.60 after closing flat at $33.71.

The stock surge is a sign of Wall Street’s desire for the company’s leaders to put an end to the three-year turnaround attempt that CEO Marissa Mayer has overseen.

Also Read: Why Marissa Mayer's Yahoo Keeps Sinking - And Whether She'll Be Around Long Enough to Save It

As TheWrap reported, the majority of media industry analysts no longer view Mayer as the right fit to lead the media giant.

Media and entertainment adviser Andy Marks told TheWrap: “I don’t think Marissa was equipped to be in the advertising business and to serve Madison Avenue in the way they need to be served.”

Also Read: Yahoo Board Weighs Potential Sale (Report)

Marks’ comments echo what many industry experts have described as Mayer’s unfocused, scattershot content approach that’s contributed to a lack of identity and connection with millennials.

“A thoughtful and focused content play was their biggest opportunity to attract millennials (and beyond) and re-introduce them to Yahoo! as an entertainment brand,” media strategist Jennifer Kavanagh told TheWrap.

Also Read: Yahoo Blames 'Community,' Original Shows for $42 Million Write-Down

While deciding on a sale of Yahoo, or individual parts of the company, board members will also have to determine whether to move forward with the still-in-the-works spinoff of Chinese E-commerce giant Alibaba, in which Yahoo holds roughly $30 billion in shares.

As China’s economy has shrunk in recent months, enthusiasm for the Alibaba sale has stalled.

Also Read: Yahoo Q3 2015 Earnings Fall Short of Expectations

Another complicating factor was the IRS’ decision to deny Yahoo’s request for a ruling on whether its Alibaba spinoff would be considered tax-free, creating an uncertainty that makes the spinoff much less beneficial for Yahoo.

Yahoo’s shares have dropped 33 percent this year and revenue is projected to dip 8 percent in 2015.

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