Yahoo CEO Marissa Mayer is spinning off the company’s prized stake in China’s Alibaba Group Holding in a move that will let Yahoo avoid paying billions in future taxes.
A newly formed entity called SpinCo will inherit ownership of Yahoo’s 384 million Alibaba shares when the tax-free spin-off is completed toward the end of this year.
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Other stockholders also liked Mayer’s decision. Yahoo’s stock gained $3.49, or more than 7 percent, to $51.48 in extended trading.
Tuesday’s much-anticipated announcement about the management of Yahoo’s 15 percent stake in Alibaba overshadowed Yahoo’s results for the final three months of last year.
Yahoo’s shareholders are far more interested in Mayer’s plans for the Alibaba stake because it’s currently worth about $39 billion. That’s far more than the value of Yahoo’s own online services, which have been struggling to generate more revenue for the past six years.
