Yahoo, Inc. announced that it will pay back 85 percent of the proceeds from $7.6 billion sale of half its stake in China’s Alibaba Group.
The company released the statement on Tuesday after finalizing the deal. A few months ago the company said that it might pay back all of the proceeds but tracked back on it. Now the company says that it will spend the rest 15 percent on future investments.
However, for some experts, the 85 percent of proceeds is still a large amount of money that will go investors’ way. They are of the opinion that Yahoo should have invested more in product developments, especially in booming social networking business.
“That’s easy to say when you haven’t been a shareholder sitting on this stock that has done nothing for five years,” Wedge Partners analyst Martin Pyykkonen said Tuesday, “but I still think they need to be reinvesting to try to regenerate growth.”
Global Equities analyst Trip Chowdhry said Yahoo’s new stunt is simply “myopic”.
“The money they’re getting should be invested in new products, attracting new people and going aggressively against Facebook “, said Chowdhry. “You do not get a technical CEO like Marissa Mayer to spread out the proceeds from Alibaba — any brain-dead executive could do that.”
Yahoo is certainly taking a shareholder friendly approach to bring prosperity to the company. This might be a good move, had it not been for Mayer. In her case more was expected to have been done and in a certain unorthodox way.