In late July 2013, Managing Director of Clairemont Capital, Danielle Engle, was contemplating what to do about a sizable investment her fund had in the stock of Yahoo! Inc. In mid-2012, Clairemont had invested almost $75M in Yahoo! after an extremely visible proxy fight settled with prolific activist investor Daniel Loeb of hedge fund Third Point. Since that time, Loeb and his co-workers had joined the board, the company had hired a brand new CEO as well as the stock price was up almost 80%, raising the value of the investment of Clairemont by $60M in less than a year. But Yahoo! had only announced an agreement to buy back two-thirds of Third Point's stake in the company.
It had also affirmed that Loeb and two other company managers selected at his request would step down from the panel. At the consequently the same time, Alibaba, the giant Chinese ecommerce business of which Yahoo! possessed a sizable stake, was broadly expected to go public in the not too remote future. What should Clairemont Capital do with its investment in Yahoo! in rejoinder to this news? This case offer pupils with opportunities to discuss the interface between business model and a business growth strategy investor activism and its valuation, discounted cash-flow valuation analysis, multiples valuation, transaction-based valuation, and firm valuation by parts.
Valuing Yahoo! in 2013 Case Study Solution
PUBLICATION DATE: November 18, 2013 PRODUCT #: 214048-PDF-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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