On Dec. 13, 2015, SpringOwl shared the attached 99 page presentation which had been sent to the Yahoo board. In it, we argue for why change is needed from the status quo at Yahoo, why selling the core business now at the lows isn't attractive for long-term shareholders and our 9 point plan for turning around the company.
Every year Upfront Ventures surveys our peer group for their sentiment on the fund raising environment, burn rates, areas of technology interest and the year ahead. This report summarizes the views as of January 2017.
PreMoney SF 2017: State of the Venture Capital Industry by Mark Suster500 Startups
Global capital flows have warmed the venture capital industry, leading to increased investment from foreign investors like China, increased corporate venture capital activity, and more capital from limited partners. This influx of "global warming" has supported higher valuations and more deals from 2013 to 2015. However, some correction occurred in 2016 as valuations declined and more venture capitalists cut back on investment. Still, winter was relatively mild due to sustained global capital flows into the US startup ecosystem. Going forward, the venture capital industry is well-positioned with significant dry powder from limited partners and the continued influx of global capital.
Upfront LP Survey of the Venture Capital & Startup IndustryMark Suster
Upfront Ventures surveyed Limited Partners (LPs) on their outlook on the venture capital markets and the underlying technology startups we back. This presentation created in Q1 2017 shares this outlook.
The State of the Venture Capital Industry is an annual report produced by TrueBridge Capital Partners highlighting the trends in venture fundraising, investing, valuations, exits, and performance.
All data sourced from Dow Jones VentureSource, Dow Jones LP Source, CB Insights, PitchBook, and Cambridge Associates.
Every year Upfront Ventures surveys our peer group for their sentiment on the fund raising environment, burn rates, areas of technology interest and the year ahead. This report summarizes the views as of January 2017.
PreMoney SF 2017: State of the Venture Capital Industry by Mark Suster500 Startups
Global capital flows have warmed the venture capital industry, leading to increased investment from foreign investors like China, increased corporate venture capital activity, and more capital from limited partners. This influx of "global warming" has supported higher valuations and more deals from 2013 to 2015. However, some correction occurred in 2016 as valuations declined and more venture capitalists cut back on investment. Still, winter was relatively mild due to sustained global capital flows into the US startup ecosystem. Going forward, the venture capital industry is well-positioned with significant dry powder from limited partners and the continued influx of global capital.
Upfront LP Survey of the Venture Capital & Startup IndustryMark Suster
Upfront Ventures surveyed Limited Partners (LPs) on their outlook on the venture capital markets and the underlying technology startups we back. This presentation created in Q1 2017 shares this outlook.
The State of the Venture Capital Industry is an annual report produced by TrueBridge Capital Partners highlighting the trends in venture fundraising, investing, valuations, exits, and performance.
All data sourced from Dow Jones VentureSource, Dow Jones LP Source, CB Insights, PitchBook, and Cambridge Associates.
The document summarizes findings from an analysis of over 300 investments made by First Round Capital over 10 years. Some of the key findings include:
- Companies with female founders performed 63% better than those with only male founders.
- Founding teams with experience at major tech companies like Google and Facebook saw their companies perform 160% better.
- Teams with more than one founder significantly outperformed solo founders, by 163%.
- Technical co-founders were critical for enterprise companies, which saw 230% better performance, but did not provide as much benefit for consumer companies.
- Companies discovered through unconventional means like Twitter or demo days performed 58% better than referred companies.
The State of the Venture Capital Industry is an annual report produced by TrueBridge Capital Partners highlighting the trends in venture fundraising, investing, valuations, exits, and performance.
All data sourced from Thomson Reuters, VentureSource, CB Insights, PitchBook, and Cambridge Associates.
- Venture capital fundraising and the number of funded startups have significantly increased over the past 10 years, with yearly funded startups up 3x and yearly capital deployed up 6x.
- Private funding levels for startups closely follow public market performance, with funding announcements lagging public markets by 1-3 months. The report recommends raising funds now before public markets decline further.
- Deal volumes have increased at all stages from seed to late stage financing over the past decade, though seed and Series A financing pace in 2016 is down compared to 2015 levels, with increased competition for deals.
- Venture capital fundraising and investments reached record levels in 2015, with more money coming from non-traditional investors. However, public tech valuations have dropped and private valuations are correcting from unsustainable highs.
- Most venture capitalists expect valuations to decline further in 2016 and are advising portfolio companies to cut costs. Fewer IPO and acquisition exits also have VCs taking a more cautious approach to new investments.
- Limited partner investors in venture funds remain concerned about high investment pacing, valuations, and company burn rates. However, most will maintain rather than decrease their commitments to venture capital over the next three years.
Презентация Арсения Даббаха, CEO и управляющего партнера RMG partners, с конференции СтартUp Travel 2016, проходившей 22 июня 2016 года в технопарке Строгино.
Chinese startup executives surveyed for Silicon Valley Bank's annual Innovation Economy Outlook report seek venture capital funding and have long-term goals of going public through IPOs. However, they face challenges securing funds and finding qualified talent like startups in other countries. While fundraising is difficult globally, Chinese startups particularly struggle with recruiting talent and accessing financing. Cybersecurity is also a major policy concern for Chinese companies.
The Changing Structure of the Venture Capital IndustryMark Suster
I presented this deck at the 2014 PreMoney Conference. I wrote a blog post here that goes into more detail: http://bit.ly/ChangingVC
The video of the presentation I gave is here: http://youtu.be/5MClCBUjbbE
The VC industry is changing. The press has focused on the wrong story - crowd funding. The bigger story is the shift from public financing to private financing and the bifurcation of the venture industry. This presentation examines the case.
SpringOwl's 99 Page Presentation On Turning Around ViacomEric Jackson
In this 99 page presentation, we lay out why Viacom's stock price has been cut in half in the past year, and our proposed plan for turning the company around.
This document provides an overview of the findings from a report on women in U.K. venture capital in 2017. The key findings include:
- Women comprised just 27% of the overall U.K. venture capital workforce, significantly lower than their 47% representation in the national labor force.
- Only 18% of investment professionals (analysts, associates, principals, partners) in U.K. venture capital firms were women.
- Merely 13% of decision makers (partners or equivalents) in U.K. venture capital firms were women.
- Nearly half (48%) of U.K. venture capital firms had no women represented on their investment teams.
Silicon Valley Bank’s annual Startup Outlook survey provides insight into how startups in the UK, US and China are feeling about the year ahead. The 2016 report finds that while startups across the globe are eternally optimistic, they are preparing for a new reality.
Learn more about the Startup Outlook Report and view the US and China reports at www.svb.com/IEO.
Upfront Ventures surveys VC firms every year to gauge their views on technology markets. This year we asked people their views about cryptocurrencies & blockchain.
United States Wealth Report 2015 infographicCapgemini
United States Wealth Report 2015 infographic highlights the key findings of the report sections - Market Sizing, HNWI Behaviors and the Spotlight on Automated Advice
This document provides summaries of several articles from an investment magazine. It discusses how Millennials view money and investing differently than previous generations, focusing more on social media companies and expecting transparency. It also summarizes an article on how corporate stock buybacks provide continued support for stock prices. Finally, it interviews an advisory couple on how they get to know clients personally and use active money managers to construct customized portfolios tailored to each client's needs and risk tolerance.
Silicon Valley Bank’s annual Startup Outlook survey provides insight into how startups in the US, UK and China are feeling about the year ahead. The 2016 report finds that while startups across the globe are eternally optimistic, they are preparing for a new reality.
Learn more about the Startup Outlook Report and view the UK and China reports at www.svb.com/IEO.
The document discusses entrepreneurship and startups in Italy and the United States. It compares characteristics of entrepreneurs such as age, gender, education, and prior experience between the two countries. It also discusses topics related to startups including business plans, lean startup methodology, funding sources, venture capital investment processes, and acquisition strategies of large tech companies. The document provides statistics, examples, and conclusions on building entrepreneurial ecosystems.
The IPO Window Reopens:
We finally saw the IPO window crack open in Q3 2016, as proceeds from technology M&A are leaving investors flush with cash to reinvest and driving demand for IPOs and follow-on offerings.
In this third-quarter update on State of the Markets, my team analyzed investment and exit data to identify key trends impacting clients:
1. The number of IPOs exceeded private IPOs for the first time since Q2 2013, as crossover investors’ interest in large pre-IPO financings dropped off.
2. In the U.S., the pace of unicorn exits in Q3 exceeded new entrants.
3. After plummeting in the first half of 2016, values of publicly traded unicorns showed signs of recovery.
Learn more by reading the new State of the Markets report. As with any review of the markets, conditions can turn quickly. We are, however, confident that the fundamentals driving innovation will be strong through the end of 2016.
This is First Round's effort to provide an in-depth snapshot of what founders across the entire tech ecosystem think, feel, fear and value. We surveyed over 860 venture-backed founders who volunteered their experience and opinions.
Sass Code Reviews - How one code review changed my life #SassConf2015Stacy Kvernmo
After writing CSS for over 10 years you'd think you would know everything there is to know, right? I couldn't be more wrong and I found out the hard way. While my first formal code review session was painfully embarrassing it was also the most important lesson I have learned throughout my career. Code reviews force you to communicate on a different level which ultimately leads to more thoughtful coding practices. When writing Sass and other pre-processed languages it is even more important that you review your code continually, which even the more seasoned front end developers may neglect at times.
Bottom line: Code reviews will make you better.
In this webinar international bestselling author, Andrew Griffiths, talks with leading productivity authority, Sam Harrop, to share 101 simple but highly effective productivity hacks.
Nothing is off limits in this presentation - and if you want to see the video recording of the actual webinar - please visit www.andrewgriffithsblog.com.
The document summarizes findings from an analysis of over 300 investments made by First Round Capital over 10 years. Some of the key findings include:
- Companies with female founders performed 63% better than those with only male founders.
- Founding teams with experience at major tech companies like Google and Facebook saw their companies perform 160% better.
- Teams with more than one founder significantly outperformed solo founders, by 163%.
- Technical co-founders were critical for enterprise companies, which saw 230% better performance, but did not provide as much benefit for consumer companies.
- Companies discovered through unconventional means like Twitter or demo days performed 58% better than referred companies.
The State of the Venture Capital Industry is an annual report produced by TrueBridge Capital Partners highlighting the trends in venture fundraising, investing, valuations, exits, and performance.
All data sourced from Thomson Reuters, VentureSource, CB Insights, PitchBook, and Cambridge Associates.
- Venture capital fundraising and the number of funded startups have significantly increased over the past 10 years, with yearly funded startups up 3x and yearly capital deployed up 6x.
- Private funding levels for startups closely follow public market performance, with funding announcements lagging public markets by 1-3 months. The report recommends raising funds now before public markets decline further.
- Deal volumes have increased at all stages from seed to late stage financing over the past decade, though seed and Series A financing pace in 2016 is down compared to 2015 levels, with increased competition for deals.
- Venture capital fundraising and investments reached record levels in 2015, with more money coming from non-traditional investors. However, public tech valuations have dropped and private valuations are correcting from unsustainable highs.
- Most venture capitalists expect valuations to decline further in 2016 and are advising portfolio companies to cut costs. Fewer IPO and acquisition exits also have VCs taking a more cautious approach to new investments.
- Limited partner investors in venture funds remain concerned about high investment pacing, valuations, and company burn rates. However, most will maintain rather than decrease their commitments to venture capital over the next three years.
Презентация Арсения Даббаха, CEO и управляющего партнера RMG partners, с конференции СтартUp Travel 2016, проходившей 22 июня 2016 года в технопарке Строгино.
Chinese startup executives surveyed for Silicon Valley Bank's annual Innovation Economy Outlook report seek venture capital funding and have long-term goals of going public through IPOs. However, they face challenges securing funds and finding qualified talent like startups in other countries. While fundraising is difficult globally, Chinese startups particularly struggle with recruiting talent and accessing financing. Cybersecurity is also a major policy concern for Chinese companies.
The Changing Structure of the Venture Capital IndustryMark Suster
I presented this deck at the 2014 PreMoney Conference. I wrote a blog post here that goes into more detail: http://bit.ly/ChangingVC
The video of the presentation I gave is here: http://youtu.be/5MClCBUjbbE
The VC industry is changing. The press has focused on the wrong story - crowd funding. The bigger story is the shift from public financing to private financing and the bifurcation of the venture industry. This presentation examines the case.
SpringOwl's 99 Page Presentation On Turning Around ViacomEric Jackson
In this 99 page presentation, we lay out why Viacom's stock price has been cut in half in the past year, and our proposed plan for turning the company around.
This document provides an overview of the findings from a report on women in U.K. venture capital in 2017. The key findings include:
- Women comprised just 27% of the overall U.K. venture capital workforce, significantly lower than their 47% representation in the national labor force.
- Only 18% of investment professionals (analysts, associates, principals, partners) in U.K. venture capital firms were women.
- Merely 13% of decision makers (partners or equivalents) in U.K. venture capital firms were women.
- Nearly half (48%) of U.K. venture capital firms had no women represented on their investment teams.
Silicon Valley Bank’s annual Startup Outlook survey provides insight into how startups in the UK, US and China are feeling about the year ahead. The 2016 report finds that while startups across the globe are eternally optimistic, they are preparing for a new reality.
Learn more about the Startup Outlook Report and view the US and China reports at www.svb.com/IEO.
Upfront Ventures surveys VC firms every year to gauge their views on technology markets. This year we asked people their views about cryptocurrencies & blockchain.
United States Wealth Report 2015 infographicCapgemini
United States Wealth Report 2015 infographic highlights the key findings of the report sections - Market Sizing, HNWI Behaviors and the Spotlight on Automated Advice
This document provides summaries of several articles from an investment magazine. It discusses how Millennials view money and investing differently than previous generations, focusing more on social media companies and expecting transparency. It also summarizes an article on how corporate stock buybacks provide continued support for stock prices. Finally, it interviews an advisory couple on how they get to know clients personally and use active money managers to construct customized portfolios tailored to each client's needs and risk tolerance.
Silicon Valley Bank’s annual Startup Outlook survey provides insight into how startups in the US, UK and China are feeling about the year ahead. The 2016 report finds that while startups across the globe are eternally optimistic, they are preparing for a new reality.
Learn more about the Startup Outlook Report and view the UK and China reports at www.svb.com/IEO.
The document discusses entrepreneurship and startups in Italy and the United States. It compares characteristics of entrepreneurs such as age, gender, education, and prior experience between the two countries. It also discusses topics related to startups including business plans, lean startup methodology, funding sources, venture capital investment processes, and acquisition strategies of large tech companies. The document provides statistics, examples, and conclusions on building entrepreneurial ecosystems.
The IPO Window Reopens:
We finally saw the IPO window crack open in Q3 2016, as proceeds from technology M&A are leaving investors flush with cash to reinvest and driving demand for IPOs and follow-on offerings.
In this third-quarter update on State of the Markets, my team analyzed investment and exit data to identify key trends impacting clients:
1. The number of IPOs exceeded private IPOs for the first time since Q2 2013, as crossover investors’ interest in large pre-IPO financings dropped off.
2. In the U.S., the pace of unicorn exits in Q3 exceeded new entrants.
3. After plummeting in the first half of 2016, values of publicly traded unicorns showed signs of recovery.
Learn more by reading the new State of the Markets report. As with any review of the markets, conditions can turn quickly. We are, however, confident that the fundamentals driving innovation will be strong through the end of 2016.
This is First Round's effort to provide an in-depth snapshot of what founders across the entire tech ecosystem think, feel, fear and value. We surveyed over 860 venture-backed founders who volunteered their experience and opinions.
Sass Code Reviews - How one code review changed my life #SassConf2015Stacy Kvernmo
After writing CSS for over 10 years you'd think you would know everything there is to know, right? I couldn't be more wrong and I found out the hard way. While my first formal code review session was painfully embarrassing it was also the most important lesson I have learned throughout my career. Code reviews force you to communicate on a different level which ultimately leads to more thoughtful coding practices. When writing Sass and other pre-processed languages it is even more important that you review your code continually, which even the more seasoned front end developers may neglect at times.
Bottom line: Code reviews will make you better.
In this webinar international bestselling author, Andrew Griffiths, talks with leading productivity authority, Sam Harrop, to share 101 simple but highly effective productivity hacks.
Nothing is off limits in this presentation - and if you want to see the video recording of the actual webinar - please visit www.andrewgriffithsblog.com.
Rand looks at Moz's 2015 analysis of ranking factors in Google's search engine and compares opinion data, correlation numbers, and experiments to give a picture of how modern SEO fits together.
Imagine a culture where the input of the whole organization turns an individual idea into a user story in just a couple of hours, where everybody's goal is to make the customer’s job easier and more effective, and where you work on projects you love instead of projects you loathe. A great coding culture concentrates on making developers productive and happy by removing unnecessary overhead, bringing autonomous teams together, helping the individual programmer to innovate, and raising awareness among developers about how to create better code.
I will talk about how to establish and foster a strong engineering-focused culture that scales from a small team to a huge organization with hundreds of developers. I'll give lots of examples from our experience at Atlassian to show that once you're working in a great coding culture, you won't want to work anywhere else.
https://www.youtube.com/watch?v=TAk04-_M-JM&feature=youtu.be
Last year, we presented the top, must-know, culturally relevant trends for 2015 and our predictions were 83% accurate!
To help the “curious class” stay relevant in 2016, we’ve assembled an A-Z glossary of what trends we predict to be 100 must-know terms and concepts of 2016.
We hope this cultural crib sheet will help prepare you for the year ahead!
Have you ever felt trapped in a bad PowerPoint presentation? Ever listen to a speaker drone on like a zombie? Do boring uninspiring slides leave you feeling like the walking dead? Don’t be a PowerPoint zombie! Here are 6 tips to avoid Death by Powerpoint!
Design has become a game changer in Silicon Valley. This #DesignInTech Report highlights the rising importance of design in the entrepreneurial ecosystem. The report covers trends ranging from the record amounts of funding flowing into design-led startups to M&A activity with major tech corporations. Beyond designers and technologists, this report will appeal to a broad audience. For all of us who use a computer or mobile device, great design is changing how we live and work. This study helps explain why.
1) The venture capital outlook document discusses signs that private tech markets are overvalued due to an influx of new capital sources investing with less pricing discipline.
2) Late-stage valuations, median revenue multiples, and e-commerce multiples are much higher for private companies compared to historical levels and public market comparables.
3) Over 2/3 of mid-late stage deals now include non-VC investors like corporations, hedge funds, and mutual funds, and round sizes have increased with less consideration for price.
4) While some overpricing may occur, the document concludes that technology innovation will continue growing as a proportion of the economy, leading to returns for top venture capital firms.
This is First Round's effort to provide an in-depth snapshot of what founders across the entire tech ecosystem are thinking and doing, what they're excited about and worried about, and how they're seeing the market. We surveyed venture-backed founders from everywhere — less than 25% from the First Round community — and received over 500 responses, volunteering their experience and opinions.
DocSend Fundraising Research: What we Learned from 200 Startups Who Raised $360MDocSend
Why do some startups get funded? What makes for the best pitch? How does the process work?
DocSend recently teamed up with Professor Tom Eisenmann from Harvard Business School. Together, we conducted research that gave us the answers to those questions. We studied the fundraising of 200 startup companies as they went through their Series Seed and Series A rounds. Altogether, these companies raised more than $360 million.
Why this data is awesome:
Fundraising is a historically opaque endeavor. There’s very little data available and most advice tends to be anecdotal. DocSend is in the unique position of being able to quantitatively analyze the interaction between founders and investors, and tie that to fundraising outcomes in a statistically meaningful way.
Why we built this report:
DocSend aims to help companies share documents in a smarter, safer, and more impactful way. We believe this research is in service of that mission and can help push the startup ecosystem forward as a whole.
Background on DocSend:
DocSend helps sales people track and control documents they send to clients. We’ve also become very popular amongst founders in the fundraising process. Hundreds of startups have used our platform to circulate pitch decks to investors.
Ready to ditch email attachments and put your pitch materials to work for you?
Sign up for a free plan at docsend.com
The document discusses trends in consumer tech and media from 2015-2020. It predicts that the industry will grow by over $500 billion in that time period, with the average American spending more time on tech and media than on work or sleep. It also notes that messaging platforms will surpass social networks as the dominant media activity and that the next big winners in streaming audio are already gaining popularity quietly.
Let's talk about the job of a product manager and how to do it really well. Based off of this post: https://medium.com/@joshelman/a-product-managers-job-63c09a43d0ec#.v0kdyf816
We spend more time working than doing anything else in life. Yet for too many people, the experience of work is demotivating and dehumanizing.
I don’t think it has to be this way, and I’m willing to bet you don’t either.
At Google, we’ve learned a ton about what makes for an enjoyable and productive workplace. We’re not alone – lots of other companies, ranging from grocers (e.g., Wegmans) to textile companies (e.g., the Brandix Group) to Brooklyn delis (e.g., Russ & Daughters), as well as academics and scientists, have learned the same simple truth: there are straightforward things we can do to make work better.
My new book, "Work Rules!", is an attempt to bring this together and offer you practical tools to improve work, no matter what you do. Check out this visual preview of the book and visit www.workrules.net if you’d like to pick up a copy or learn more!
SpringOwl's 99 Page Presentation On How To Best Turnaround Yahoo!Eric Jackson
On Dec. 13, 2015, SpringOwl released this 99 page presentation on why Yahoo needs substantial change from the status quo and why it would be a mistake to sell the core business now at the lows. We offer our 9 point plan for how to turn around the company and create the most amount of value with the least risk for shareholders (and employees)
Houlihan Lokey: Valuation in the Delaware CourtsHoulihan Lokey
This document summarizes a panel discussion on valuation issues in Delaware courts. The panel discusses recent developments in valuation methodologies, appraisal proceedings, and fiduciary duty litigation where valuation is at issue. The key points are:
1) The Delaware courts, through appraisal cases, provide guidance on acceptable valuation methodologies such as discounted cash flow analysis and give preferences to certain inputs like using management projections.
2) Appraisal proceedings determine "fair value" owed to shareholders for their shares, excluding any value related to a merger. Fiduciary duty cases may also involve assessing fair value.
3) Recent cases have given more weight to third-party sales values as evidence of fair value when the sales process
Why Boards Matter: Building and Developing a World Class Board of DirectorsJim Citrin
Our insights about the market for board talent across S&P 500, the U.S. Tech Industry, and early stage growth companies as well as a cross section of boards interested executives based on the Spencer Stuart Board Index, the U.S. Tech Board Index, and a SurveyMonkey survey put together as input for #WhyBoardsMatter, a joint presentation from Spencer Stuart and Kleiner Perkins.
Read the full post here:
Top 10 Learnings Growing to (Almost) $10 Million ARR: Leo's presentation at S...Buffer
Our COO Leo Widrich spoke at the SaaStr Annual conference on February 9, 2016 and shared some lessons that have helped Buffer grow. The tips range across product, marketing, and general work culture!
GP Bullhound LLP puts together its annual report on valuations, revenues and "unicorns" inside the European Union (this is the final list in which UK based companies are being counted as European!)
BoyarMiller Breakfast Forum Current State of the Capital Markets - 2014BoyarMiller
As part of its ongoing Breakfast Forum series, BoyarMiller gathers industry experts for a panel discussion on the Current State of the Capital Markets. Speakers include: Lee Partridge, Salient Partners; Cliff Atherton, GulfStar Group; and Paul Murphy, Cadence Bancorp, LLC.
Daily Derivatives Report:09 January 2020Axis Direct
Axis Direct presents daily derivatives report presenting recommendations based on technical analysis. For trading in derivatives visit https://simplehai.axisdirect.in/offerings/products/derivatives
Daily Derivatives Report:30 January 2020Axis Direct
Axis Direct presents daily derivatives report presenting recommendations based on technical analysis. For trading in derivatives visit https://simplehai.axisdirect.in/offerings/products/derivatives
Daily Technical Report:04 December 2019Axis Direct
Axis Direct presents daily derivatives report presenting recommendations based on technical analysis. For trading in derivatives visit https://simplehai.axisdirect.in/offerings/products/derivatives
Axis Direct presents daily derivatives report presenting recommendations based on technical analysis. For trading in derivatives visit https://simplehai.axisdirect.in/offerings/products/derivatives
Daily Derivatives Report:12 February 2020Axis Direct
Axis Direct presents daily derivatives report presenting recommendations based on technical analysis. For trading in derivatives visit https://simplehai.axisdirect.in/offerings/products/derivatives
Daily Technical Report:29 November 2019Axis Direct
The document provides a technical analysis of the Indian stock market indices Nifty and Sensex. It summarizes that both indices opened higher and remained range-bound, closing near their daily highs. On the daily chart, Nifty has formed a bullish candle with lower shadow, indicating buying support at lower levels. The technical indicators reflect a positive bias in the short to medium term. Key support and resistance levels for the indices are provided. Two stock recommendations - GAIL and TITAN - are given based on the previous day's close.
Axis Direct presents daily derivatives report presenting recommendations based on technical analysis. For trading in derivatives visit https://simplehai.axisdirect.in/offerings/products/derivatives
Daily Technical Report:01 November 2019Axis Direct
Axis Direct presents daily derivatives report presenting recommendations based on technical analysis. For trading in derivatives visit https://simplehai.axisdirect.in/offerings/products/derivatives
Daily Derivatives Report:21 November 2019Axis Direct
The daily derivative report provides a summary of the movements in the Nifty futures market and highlights stocks with significant changes in open interest. Nifty futures closed at 12018.15 indicating short covering. FII's were net sellers in the derivatives segment. Key support and resistance levels for current expiry are noted as 11900 and 12000 respectively based on open interest concentration. Stocks such as DISHTV, CONCOR and HINDPETRO showed long build up while TORNTPHARMA, CESC, IOC and NIITTECH saw short build up.
This document outlines an expiry derivative strategy involving the sale of call and put options on the Nifty index to generate a maximum profit of Rs. 1900 with a maximum loss of Rs. 600. The strategy involves selling 25 contracts each of the 8400 October call and 7600 October put options, expiring on 29th October 2015. A pay-off table and chart are provided showing the profit/loss outlook under different index levels.
Axis Direct presents daily derivatives report presenting recommendations based on technical analysis. For trading in derivatives visit https://simplehai.axisdirect.in/offerings/products/derivatives
Axis Direct presents daily derivatives report presenting recommendations based on technical analysis. For trading in derivatives visit https://simplehai.axisdirect.in/offerings/products/derivatives
Daily Derivatives Report:07 January 2020Axis Direct
The daily derivative report provides a summary of developments in the derivatives market. It notes that the Nifty futures closed at a premium compared to the previous day and with an increase in open interest, indicating short build up. FII's were net sellers in the derivatives segment, selling over Rs. 2100 crores worth of index futures, options and stock futures. Key support and resistance levels are identified based on options data. Specific stocks that witnessed long or short build up are also mentioned.
Daily Derivatives Report:06 February 2020Axis Direct
Axis Direct presents daily derivatives report presenting recommendations based on technical analysis. For trading in derivatives visit https://simplehai.axisdirect.in/offerings/products/derivatives
The document discusses investment opportunities in the second half of 2010 and beyond globally and in Asia. It notes that while unprecedented fiscal stimulus was implemented after the global financial crisis, deleveraging of household debt is still ongoing and public sector debt is a worry. Competition for savings is increasing as stimulus is withdrawn. Asian property markets like Taiwan and China saw asset bubbles. The outlook remains uncertain as stimulus is withdrawn in major economies.
Daily Technical Report:07 February 2020Axis Direct
Axis Direct presents daily derivatives report presenting recommendations based on technical analysis. For trading in derivatives visit https://simplehai.axisdirect.in/offerings/products/derivatives
Axis Direct presents daily derivatives report presenting recommendations based on technical analysis. For trading in derivatives visit https://simplehai.axisdirect.in/offerings/products/derivatives
Daily Technical Report:05 December 2019Axis Direct
The Nifty 50 index closed at 12,037 points, up 0.36% on the day. On the daily chart, the index has formed a bullish candlestick pattern indicating the bulls have returned in the short term. The index needs to break above the previous day's high of 12,069 for the uptrend to continue. Stocks like Titan and Escorts are suggested for the day, with buy and sell triggers provided. Technical indicators like RSI and Stochastic have turned negative from overbought levels.
Ähnlich wie SpringOwl's 99 Page Presentation On How To Best Turnaround Yahoo! (20)
Part 2 Deep Dive: Navigating the 2024 Slowdownjeffkluth1
Introduction
The global retail industry has weathered numerous storms, with the financial crisis of 2008 serving as a poignant reminder of the sector's resilience and adaptability. However, as we navigate the complex landscape of 2024, retailers face a unique set of challenges that demand innovative strategies and a fundamental shift in mindset. This white paper contrasts the impact of the 2008 recession on the retail sector with the current headwinds retailers are grappling with, while offering a comprehensive roadmap for success in this new paradigm.
Anny Serafina Love - Letter of Recommendation by Kellen Harkins, MS.AnnySerafinaLove
This letter, written by Kellen Harkins, Course Director at Full Sail University, commends Anny Love's exemplary performance in the Video Sharing Platforms class. It highlights her dedication, willingness to challenge herself, and exceptional skills in production, editing, and marketing across various video platforms like YouTube, TikTok, and Instagram.
The Steadfast and Reliable Bull: Taurus Zodiac Signmy Pandit
Explore the steadfast and reliable nature of the Taurus Zodiac Sign. Discover the personality traits, key dates, and horoscope insights that define the determined and practical Taurus, and learn how their grounded nature makes them the anchor of the zodiac.
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NIMA2024 | De toegevoegde waarde van DEI en ESG in campagnes | Nathalie Lam |...BBPMedia1
Nathalie zal delen hoe DEI en ESG een fundamentele rol kunnen spelen in je merkstrategie en je de juiste aansluiting kan creëren met je doelgroep. Door middel van voorbeelden en simpele handvatten toont ze hoe dit in jouw organisatie toegepast kan worden.
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SpringOwl's 99 Page Presentation On How To Best Turnaround Yahoo!
1. Confidential | For Discussion Purposes Only |
October 15, 2015
Investor Presentation
October 2015
Trimas Investor Presentation
December 2015
Yahoo! Investor Presentation:
A Better Plan For Yahoo Shareholders
1370 Avenue Of The Americas – 28th Floor New York, NY 10019 axerri@springowl.com 212.445.7829
2. Confidential | For Discussion Purposes Only |
Disclaimer
The views expressed herein represent the opinions of SpringOwl Asset Management LLC (“SpringOwl"), which opinions are based exclusively on publicly
available information with respect to Yahoo! Inc. ("Yahoo"). These materials are for general informational purposes only. They do not have regard to the
specific investment objective, financial situation, suitability, or the particular need of any specific person who may receive these materials, and should not be
taken as advice on the merits of any investment decision. Opinions expressed herein are current opinions as of the date appearing in this material only.
SpringOIwl disclaims any obligation to update the data, information or opinions contained herein. Unless otherwise indicated, financial information and data
used herein have been derived or obtained from filings made with the applicable regulator by yahoo or other companies that SpringOwl considers comparable,
and from other third party reports
Except for the historical information contained herein, the matters addressed in these materials are forward-looking statements that involve certain risks and
uncertainties. You should be aware that actual results could differ materially from those contained in the forward-looking statements. SpringOwl does not
assume any obligation to update the forward-looking statements. SpringOwl has not sought or obtained consent from any third party to the use herein of
previously published information. Any such information should not be viewed as indicating the support of such third party for the views expressed herein.
Although data and information contained herein have been obtained from sources believed to be reliable, SpringOwl does not guarantee their accuracy,
completeness or fairness. SpringOwl has relied upon and assumed, without independent verification, the accuracy and completeness of all data and
information available from public sources. No warranty is made that any data or information contained herein, whether delivered or obtained from filings made
with a regulator or from any third party. Is accurate SpringOwl shall not be responsible or have any liability for any misinformation contained in any regulatory
filing or third party report.
There is no assurance or guarantee with respect to the prices at which any securities of Yahoo will trade, and such securities may not trade at prices that may
be implied herein. The estimates, projections, pro forma information and potential impact of the proposals set forth herein are based on assumptions that
SpringOwl believes to be reasonable, but there can be no assurance or guarantee that actual results or performance of yahoo will not differ, and such
differences may be material.
SpringOwl currently owns common stock of Yahoo. SpringOwl may from time to time sell all or a portion of its shares in open market transactions or otherwise
(including via short sales), buy additional shares (in open market or privately negotiated transactions or otherwise), or trade in options, puts, calls or other
derivative instruments relating to such shares. SpringOwl also reserves the right to take any actions with respect to its investment in Yahoo as it may deem
appropriate. Including, but not limited to, communicating with management of Yahoo, the board of directors of Yahoo, and other investors. Neither these
materials nor anything contained herein is intended to be nor should it be construed or used as, investment, tax, legal or financial advice, an opinion of the
appropriateness of any security or investment, or an offer, or the solicitation of any offer, to buy or sell any security or investment.
2
3. Confidential | For Discussion Purposes Only |
Table of Contents
I. Executive Summary
I. Company Overview…(5)
II. A Breakdown of All Fundamentals…(6-15)
III. Private Equity, Starboard, Turnaround…(16-18)
IV. Yahoo’s Potential and Value Creation Plan…(19-23)
II. How Yahoo Lost Its Way
I. Yahoo Once King Of The Internet…(25)
II. Constantly Changing Leadership …(26)
III. How Yahoo Used To Make Money vs. Today …(27-28)
IV. Has Yet To Make the Shift To Mobile …(29-30)
III. The Status Quo At Yahoo Isn’t Working
I. Why Yahoo’s Board Picked Mayer …(32-35)
II. A Refusal To Face Reality On Costs …(36)
III. Expensive M&A …(37-43)
IV. Where Are The New Products …(44-47)
V. The Shift To Mobile …(48-53)
VI. Pay For No Performance…(54-57)
VII. Worse Culture Than When She Started…(58-60)
VIII. Unprofitable Deals… (61)
IX. Stock Buybacks…(62)
X. Poor Performance of Core Business…(63-66)
IV. StarBoard’s “Sell At Lows” Plan
I. The StarBoard Plan…(68)
II. The Problems With StartBoard Plan…(69)
III. Private Equity Has Tried To Buy Yahoo For Cheap Before …(70)
IV. StarBoard’s “Sell At Lows” Plan Isn’t Attractive…(71)
V. The Downside Risk of Selling/Spinning The Core…(72)
V. A Better Plan For Yahoo Shareholder
I. A Yahoo Turnaround for Yahoo’s Public Shareholders…(74-76)
II. 10-Step Turnaround Plan…(77-85)
III. Yahoo’s Next CEO…(86-88)
IV. Potential Buyer of Yahoo Core…(89-90)
V. Summary of Yahoo Action Plan…(91-93)
VI. Appendices
I. Corporate Governance…(95)
II. Board Profile…(96)
III. Board Compensation Profile…(97)
IV. Ownership Profile…(98)
V. ISS Peer Group…(99)
3
4. Confidential | For Discussion Purposes Only | 4
Executive Summary
Section I
5. Confidential | For Discussion Purposes Only |
Yahoo! and “Core Business” Overview
5
Financial Snapshot (12/09/15)
($ in millions, except per share data)
Current Price
52-Week High
52-Week Low
$33.99
$51.68
$27.20
LTM Revenue (ex-TAC)
LTM EBITDA, Adj
LTM Net Income
$4,268
$477.1
$392.7
Market Cap
Net Cash
Total Debt
Enterprise Value
$33,370
$5,500
$1,217
$25,600
EV/Revenue
EV/EBITDA
EV/EBITDA Ex-Asia Stakes
F P/E
P/FCF
6.0x
53.7x
2.2x1
57.8
NegaZve
Total Debt/EBITDA
2.6x
Note: As of 12/09/2015
Source: Public Data; ISS Proxy Advisory Services
1 Assumes Asian Stakes taxed at 38%
What is What is the “Core Business”?
Yahoo! Inc. is a technology company. Its “Core” is engaged in providing Internet
search, communication and digital content. The Company manages its business
geographically: the Americas; Europe, the Middle East and Africa (EMEA), and
Asia Pacific. The Company's products include Search, Communications, Digital
content, Flickr, and Tumblr. Yahoo Search is a search engine which serves as a
starting point to navigate the Internet and discover information, which is ranked
and organized -based on their relevance to the query. Yahoo Mail connects users
across mobile phones, tablets and PC. Yahoo.com offers news and information,
including Yahoo original content and partner content. Flickr is a Web and mobile
photo management and sharing service. Tumblr offers a Web platform and mobile
applications (particularly on the iOS and Android platforms) that allow users to
create, share and curate content. Yahoo is also a digital publisher and advertising
technology provider.
7. Confidential | For Discussion Purposes Only |
Dec-12 Dec-13 Dec-14 Dec-15
Yahoo Nasdaq
Yahoo 3-Year Historical Chart
7
Yahoo:
81.5%
Nasdaq:
71.2%
Note: As of 12/09/2015
Source: Bloomberg (3-Year Daily Price Chart)
8. Confidential | For Discussion Purposes Only |
Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15
Nasdaq Yahoo
Yahoo 5-Year Historical Chart
8
Yahoo:
105.6%
Nasdaq:
94.8%
Note: As of 12/09/2015
Source: Bloomberg (5-Year Daily Price Chart)
9. Confidential | For Discussion Purposes Only |
Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15
Alibaba Yahoo!
But Yahoo’s Stock Has Recently Only Been A
Tracking Stock For Alibaba:
9
Yahoo:
-14.9%
Alibaba:
-10.1%
IPO: 09/14/2014
Note: As of 12/09/2015
Source: Bloomberg (1-Year Daily Price Chart)
10. Confidential | For Discussion Purposes Only |
1,447
1,506
1,457
1,206
843 638
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Current/LTM
5-Year Yahoo EBITDA Trend
Yahoo’s Core Business Is In Need Of A
Turnaround:
10
Company AOL GOOG FB TWTR Avg.
5-Year EBITDA
Growth
-40% +97% +444% -86% +100%
- 55%
Note: Current LTM as of (09/30/2015)
Source: Bloomberg
($) Millions
11. Confidential | For Discussion Purposes Only |
6,325
4,984 4,987
4,680 4,618
4947.98
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Current/LTM
5-Year Yahoo Revenue Trend (Including Traffic Acquisition Costs)
Yahoo’s Core Business Is In Need Of A
Turnaround:
11
Company AOL GOOG FB TWTR Avg.
5-Year Revenue
Growth
+6% +144% +640% +690% +370%
- 21%
Note: Current LTM as of (09/30/2015)
Source: Bloomberg
($) Millions
12. Confidential | For Discussion Purposes Only |
223
203
224
278
420
Dec 2010A Dec 2011A Dec 2012A Dec 2013A Dec 2014A
4-Year Yahoo Stock-Based Compensation Expenses
Yahoo’s Core Business Is In Need Of A
Turnaround:
12
88%
Source: Company Fillings (DEF14A)
($) Millions
13. Confidential | For Discussion Purposes Only |
Yahoo’s Headcount Still Excessively High Given
Revenues:
13
Source: Company Filings (10K), Analyst calls
3,574
5,257
6,425
6,969
7,208
6,460
6,324
4,984
4,9864,9864,986
4,6804,6804,6804,680
4,6184,6184,6184,618
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
14,000
15,000
'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15
Yahoo Full Time Employee Headcount (2004-2015) vs. Revenue (2004-2015)
Revenues HeadCount
($) Millions
Marissa Mayer Hired:
July 2012
14. Confidential | For Discussion Purposes Only |
Product Development Expenses Have Yet To Pan Out
14
Note: As of 10/22/2015
Source: Company Fillings (10K)
18%
$885M
15%
$9.83B
3%
$6.04B
Yahoo Google Apple
2014 R&D/Product Development Expenses as a % of Revenue
15. Confidential | For Discussion Purposes Only |
Selected Peer Group Comparison
15
Company
Enterprise
Value ($M)
Total
Revenue ($M
with TAC)
TTM
EBITDA
($M)
EV/EBITDA
(Trailing)
Total Debt /
EBITDA
AOL 3,920 2,569 433 7x 1.0x
GOOG 461,890 71,763 23,305 19.82x 0.4x
FB 285,450 15,940 6,600 42.9x 0.01X
TWTR 15,010 1,990 -208 -72.0x -7.6x
Note: As of 12/09/2015
Source: Bloomberg
YHOO 25,600 4,948 477
2.2x ex-Asian
Stakes Taxed
at 38%
2.6x
16. Confidential | For Discussion Purposes Only |
Private Equity Has Tried To Buy Yahoo For Cheap
Before
§ In 2011, before Dan Loeb announced Third Point’s stake, it was reported that Silver Lake and Marc Andreessen
wanted to buy Yahoo for $16.50/share or $18 billion1
§ Many commentators on CNBC at the time said this price sounded like a “good deal” for Yahoo shareholders
because Yahoo was too hard to turn around
§ If Silver Lake/Andreessen had been successful, they would have received not only Yahoo’s Core Business, its $9
billion stake in Yahoo Japan, but also its then 44% stake in Alibaba which today would be worth $89 billion
§ When you hear people say that “Yahoo should be chopped up” by private equity because Yahoo is “hopeless”, what
they’re really saying is that Yahoo’s public market shareholders should do a wealth transfer to some private equity
LPs or public holders of companies like Verizon
16
Source: 1. http://allthingsd.com/20111130/yahoo-bidders-come-in-at-16-50-to-17-50-with-plan-to-keep-jerry-yang-staying-on-board/
It’s nonsense to think Yahoo can’t be turned around as a public company
17. Confidential | For Discussion Purposes Only |
Starboard’s “Sell At the Lows” Plan Isn’t Attractive
§ Starboard – a Yahoo shareholder – on Nov. 19/15 argued that Yahoo not spin off the Alibaba stake but instead sell the
core business
§ We don’t think their “sell at the lows” argument will be compelling to either the Yahoo board or other Yahoo shareholders
§ Yahoo’s stock didn’t increase at all the day after the letter was revealed; we believe that’s because Yahoo investors don’t
believe Starboard’s plan will work and/or won’t be adopted
§ We think Starboard’s credibility has been substantially weakened in taking this “sell at the lows” approach
§ We disagree with their projected cost savings estimates of $370 - $500M/year; we think at least $2B in annual savings
are possible from headcount reductions and cost cuts
§ While we agree with their estimates about the deterioration of the Core, we can’t understand why they would then
conclude that now is the time to sell off the core business at its lowest possible value
§ Starboard’s plan – at best – will get Yahoo shareholders an extra $3-4/share for their investment (Selling the core at $6B)
§ Our plan will deliver at least an additional $30/share of value to all Yahoo shareholders
§ The right turnaround plan and the right partner to help unlock the full value of Yahoo embedded in its current assets
§ A turnaround for public shareholders, not a fire sale for a return and strategies wanting to buy a great asset on the cheap
17
Source:
1. http://www.starboardvalue.com/publications/Starboard_Value_LP_Letter_to_YHOO_08.10.15.pdf
2. http://www.starboardvalue.com/publications/Starboard_Value_LP_Letter_to_YHOO_11.19.15.pdf
What Needs to Happen Now?
We Disagree With Starboard’s Suggestion Because:
18. Confidential | For Discussion Purposes Only |
The Downside Risk of Selling/Spinning The Core
18
Source: 1 h]p://www.thestreet.com/story/13391744/1/yahoo-shareholders-need-a-be]er-soluZon-than-the-one-just-proposed.html 2. h]ps://www.sec.gov/about/laws/ica40.pdf
§ Yahoo’s board announced on December 9th, 2015 that it won’t continue with the planned spinoff of its Alibaba
stake, as the potential tax bill for proceeding was too great a risk for the directors to assume that responsibility.
§ Instead, Yahoo’s board said it would being working on a plan to spin off the core business and the Yahoo Japan
stake
§ This would leave just the Alibaba stake as part of the Yahoo stock; the core Yahoo business and Yahoo Japan
stake would trade under another ticker
§ Some shareholders think Yahoo’s board is now simply going to sell the core
The Problem With Simply Selling Or Spinning The Core1:
Yahoo Shareholders Want $30/Share More – Not $3/Share And Full Tax On BABA
§ There is a risk – not a certainty – that if Yahoo Core is sold or spun, the stake in Alibaba would become taxable on
the gains from the time of Yahoo’s investment in 2005 to today under the Investment Company Act of 19402
§ Therefore, Yahoo shareholders would owe a tax bill on the gains of the Core as well as the BABA stake
§ Why not instead:
• Start the real turnaround of the Core with new management and a new board to create $20 – 30/share in
value for current shareholders?
• Study the tax issues in more detail with the help of a partner like a Liberty?
19. Confidential | For Discussion Purposes Only |
A Better Plan For Yahoo Shareholders
§ Rather than “sell the core at the lows,” we believe a new realistic plan and an augmented board with relevant
financial and operating experience can turn around and unlock the true value embedded within Yahoo
§ The notion that some in the media – who usually have no specific knowledge about Yahoo – have recklessly put
forward that Yahoo is “unfixable” and that it should be simply “chopped up” and handed over for nothing to private
equity or strategies is insulting to all long-term public shareholders
§ Every public shareholder knows that Yahoo can do much better with the right plan and better governance
§ Selling the core for scrap value is not the answer
19
If all aspects of our value creation plan are implemented by the company, and if Alibaba
continues to recover, we believe that Yahoo’s shares may trade over $100/share
Source: SpringOwl Asset Management LLC
20. Confidential | For Discussion Purposes Only |
A Better Plan For Yahoo Shareholders
§ Re-cast Yahoo management and the board to have a clear focus on properly operating the business
§ Bring In Someone Like a Liberty as a Partner through a PIPE with board representation to advise on tax and
operating an Internet business for a 14x multiple
§ Aggressively cut costs across the Core the way Private equity surely will
§ Cut Non-Performing Businesses & Internal Search Plans
§ Focus on Best Bets Moving Forward including Finance and Sports
§ Milk The PC Business Longer Than Anyone Expects (a la AOL)
§ Build Back The Company Day by Day and Not Through Hail Mary Expensive Acquisitions
§ Reduce the share count as a sign of confidence in our plan which will benefit all shareholders
20
Image: Google Images
21. Confidential | For Discussion Purposes Only |
Key Drivers to
Unlocking Value In Yahoo’s Share Price
§ Getting The Core Business EBITDA back to $2-3B a year
• Reducing 9,000 employees as well as free food and other expensive sponsorships would generate at least $2B
a year in EBITDA
• The existing core business is generating $600 million a year in EBITDA and can hopefully get back to its more
historical levels of $1B a year
• With new operator-focused management and someone like a Liberty as a partner, we expect the core business
would receive an 8x multiple on that EBITDA rather than the current 2x
• This change would lead to an incremental $18B in value over the current implied value of the core beyond the
value for which the core could be sold today following Starboard’s “sell at the lows” plan
• Finding an optimal solution to the 384 million Alibaba shares while Alibaba tracks back to $120/share à $25.7B
in incremental value
§ Finding an optimal solution for the 35% stake in Yahoo Japan à $4.3B in incremental value
§ Optimizing the value of the Sunnyvale real estate à $1.8B in incremental value
§ Reducing the share count
§ Just reorganizing the core business through cost cuts could create an extra $30/share in value above a Starboard
sell it now outcome; with a recovery in BABA shares and tax efficiencies, Yahoo could break $100/share
21
Source: SpringOwl Asset Management LLC
22. Confidential | For Discussion Purposes Only |
Key Drivers to Unlocking Value In Yahoo’s Share Price
($B Unless Noted)
22
How Yahoo Is Valued By
The Market Today
(Asian Stakes Taxed at 38%)
Our Plan
46.11
9.61
CASH
REAL
ESTATE
CORE
1.82
24
Mkt Cap 81.2
25.7
4.3
1.82
18
44
$61.45
Difference Between
Starboard and Our
Plan
If our plan is implemented by the company and just the core business is fixed (with no additional improvement in the value of the Alibaba and YJ
stakes), we believe that Yahoo's stock would trade about $60/share or more than $30/share higher than the plan advocated by Starboard.
- =
PER SHARE $113.41
20.4
5.3
5.5
CASH
REAL
ESTATE
CORE
0
2.8
Mkt Cap 33.9
PER SHARE $35.91
716M Shares
Extra Value Created By
Starboard's Plan
20.4
5.3
5.5CASH
REAL
ESTATE
CORE
0
6
Mkt Cap 37.2
PER SHARE $39.41
1.5
$4B Cash
+
$1.8B Real
Estate
+
$4B Debt
Can Retire
228M Shares
At $43/Share
New Share
Count:
-4
Source: SpringOwl Asset Management LLC
Note: 1. Although Real Estate value is being realized, it is being used to retire shares.
2. Through working with a Liberty-like partner to realize tax efficiencies with BABA returning to $120/share and YJ increasing in value by 12%
23. Confidential | For Discussion Purposes Only |
Starboard’s Plan Sells Yahoo At The Lows; Our
Plan Unlocks Meaningful Upside for Shareholders
23
$35.00
$4.411
$22.462
$31.783
$23.474 $113.41
Current Price Starboard's Plan Core Business Asian Stakes Tax
Savings
Share Count
Reduction
Potential Total
ValueNote: 1 – Selling Yahoo Core now at the lows for $6B
2 – 8x EV/EBITDA Multiple for Core Doing $3B EBITDA ($750M Normalized EBITDA plus $2.25B in Headcount Reductions
3 – Through working with a Liberty-like partner to realize tax efficiencies with BABA returning to $120/share and YJ increasing in value by 12%
4 – Retiring 228 million shares at $43/share from $4B cash, $1.8B in real estate sales, and $4B in debt
Source: SpringOwl Asset Management LLC
24. Confidential | For Discussion Purposes Only | 24
How Yahoo Lost Its Way
Section II
25. Confidential | For Discussion Purposes Only |
Yahoo Was Once The King Of The Internet
§ When Yahoo took public shareholders’ money in 1996 in their
IPO, the Internet was just getting started
§ The Internet was a wild and woolly place and Yahoo was
there to help you make sense of it
§ Consumers gravitated to Yahoo’s quirky branding and trusted
that the company would help them find interesting content
that was meaningful to them
§ They pioneered the Internet portal concept which let you
come to one destination and get the bulk of the information
needed
25
Image: Google Images
Image: Google Images
26. Confidential | For Discussion Purposes Only |
Constantly Changing Yahoo Leadership
26
2007 2008 2009 2010 2011
2012 2013 2014 2015
Terry Semel
Quits
Jerry Yang
Becomes
CEO
Hostile Takeover by
Microsoft
Carl Icahn
Seeking And
Receiving Board
Seats
Carol Bartz
becomes
CEO
Board Fires Carol
Bartz Only 2.5 Yrs
Into Her Tenure
Proxy Fight Of Dan Loeb
From Third Point
Scott Thompson Becomes
CEO
A Revamping of
Yahoo’s Board
Yahoo’s board selling half its
stake in Alibaba for $7 billion
Marissa Mayer
Becomes CEO
More Board Turnover
& Executive
Departure
New Mayer-
friendly Board
Appointments
And Executives
Dan Loeb
Quits The
Board
Mayer Firing Her Former
Colleague From Google As Her
Hand-picked COO A Year After
Hiring
Starboard Value
Challenging Yahoo’s
Leadership
Yahoo Executives
Quitting The Company
Throughout 2015
While the world has
shifted from desktop
revenues to mobile
ones, Yahoo has
experienced a number
of changes in
leadership, changes in
the board, and outside
distractions including:
Thompson Resigns
After Having Lied
About His
Undergrad Major In
Computer Science
2012
Source: SpringOwl Asset Management LLC
27. Confidential | For Discussion Purposes Only |
How Yahoo Used To Make Money
27
§ Yahoo tries to get people to get into the habit of showing up on one of their properties every day in the hope that they can a)
get them on other Yahoo properties and b) show ads.
§ Historically, a lot of users show up every day to check their email, the Yahoo homepage, check their portfolio on Finance,
check scores and playing fantasy on Sports, and do a few searches (all boosted by search/toolbar/homepage deals)
§ In the really old days, Yahoo even ventured into commerce by trying to sell people stuff
§ An example of all their product categories from a decade ago is below
Source: Yahoo Investor Presentation, 2006
28. Confidential | For Discussion Purposes Only |
How Money On The Internet Is Made Today
28
§ But with the transition from desktop to mobile,
the reasons to come to Yahoo Properties have
either atrophied or the audiences have churned.
§ Yahoo mail isn’t as competitive with the rise of
Gmail and Apple mail
§ People are messaging more via iMessage,
Messenger, WhatsApp, Snapchat, Kik and others
instead of emailing
§ Users spend a lot of time these days on social
media like Facebook and Twitter
§ Yahoo has under-invested in Sports and Finance,
given their seize and popularity
§ Users don’t go to the homepage as much as they
used to; therefore, they don’t look at display ads
or do searches as much
§ These trends are only likely to increase, further
hurting Yahoo
Source: Wall Street Journal
29. Confidential | For Discussion Purposes Only |
Yahoo Hasn’t Made Shift To Mobile From Desktop
29
$1,024M
Facebook’s Mobile
Revenue
$165M
Twitter’s Mobile Revenue
“Not Material”
Yahoo’s Mobile Revenue
$2,965M
Facebook’s Mobile
Revenue
$406M
Twitter’s Mobile Revenue
$308M
Yahoo’s Mobile Revenue
$5,287M
Facebook’s Mobile
Revenue
$744M
Twitter’s Mobile Revenue
$485M
Yahoo’s Mobile Revenue
1H2013
1H2014
1H2015
9.6x Bigger Than Yahoo 1.3x Bigger Than Yahoo
1.5x Bigger Than Yahoo10.9x Bigger Than Yahoo
In Q315, Facebook’s mobile
revenue grew to 12.5x
Bigger than Yahoo’s1
Source:
1. http://www.wsj.com/articles/yahoo-be-careful-playing-in-traffic-1449425043
• Company Fillings (10K)
30. Confidential | For Discussion Purposes Only |
Yahoo Says They’re Doing Great In Mobile, But
They Aren’t On A Relative Basis
30
1H2015 Mobile Revenue As % Of Total Revenue1
20%
88%
74%
Source:
1. Company Fillings (10K)
2. http://www.emarketer.com/Article/Facebook-Twitter-Will-Take-33-Share-of-US-Digital-Display-Market-by-2017/1012274
31. Confidential | For Discussion Purposes Only | 31
The Status Quo at Yahoo Isn’t
Working
Section III
32. Confidential | For Discussion Purposes Only |
Why Was Marissa Mayer Picked To Run
Yahoo 4 Years Ago?
32
Image: Google Images
33. Confidential | For Discussion Purposes Only |
The Old Yahoo Board Thought Product-Focused Mayer
Would Create More Value Long-Term Than Levinsohn
33
§ New Products
§ More long-term value
created for
shareholders
§ Star name
§ Transformative M&A
Marissa Mayer
§ Job Cuts
§ More deals with
media partners like
ABC, CNBC & Katie
Couric like he had
negotiated
§ Media M&A
Ross Levinsohn
VS.
Image: Google Images
34. Confidential | For Discussion Purposes Only |
Tech Royalty Expected Significant Yahoo Job Cuts
And Still Expects It
34
Source: https://pando.com/2012/07/16/andreessens-advice-to-marissa-mayer-cut-10000-plus-jobs/;
https://twitter.com/pmarca/status/673646979277131776
July 2012: “Yahoo has 18,000 employees, and on paper it should have
closer to 6,000 to 8,000, [Silicon Valley tech investor legend Marc]
Andreessen argues. Every analyst has noted pretty much the same
thing, and to date no CEO has had the guts to cut that deeply, even as
each of them have been vilified for making cuts. Will Mayer be able to
do what most outside observers say is necessary?”
December 2015: “My view is that [Yahoo is] dramatically overstaffed”
35. Confidential | For Discussion Purposes Only |
What Yahoo Investors Got Instead
35
§ New Products
§ More long-term value
created for shareholders
§ Star name
§ Transformative M&A
Marissa Mayer
§ Job Cuts
§ More deals with media
partners like ABC,
CNBC & Katie Couric
like he had negotiated
§ Media M&A
Ross Levinsohn
VS.
§ No new products
§ Less value ascribed to the Core Business
§ Ineffective M&A
§ Job Increases Before Voluntary Attrition
§ More deals with media partners like ABC, CNBC & Katie Couric like he had negotiated
§ Essentially, Yahoo shareholders got a watered down version of the Media strategy and a less valuable Yahoo
The Result?
36. Confidential | For Discussion Purposes Only |
$10 Billion in Misallocated Capital Is A Poor Choice
36
-$4B
spent on Product Development/R&D
leading to No New Successful
Products
-$2.5Bin value destroyed on Under-water
Stock Purchases Made Since Dan
Loeb left the board in July 2013
-$3B
spent on M&A Valued at Zero Today
By Investors
-$9.5B
in Misallocated Capital
Since 2012
Source: Company Fillings (10K) / 1. h]p://video.cnbc.com/gallery/?video=3000464388
“We’re really proud of our record on capital allocation”
– Marissa Mayer, 12/09/151
37. Confidential | For Discussion Purposes Only |
$3B In Recent M&A Is Valued By Investors at Zero
In Yahoo’s Current Stock Price
Acquisitions at Yahoo Over the Past 4 Years:
37
This M&A has resulted in Zero Additional Value Implied in the Core Business For Yahoo Shareholders
Source: SpringOwl Asset Management LLC
Note: Logos found on Google Images, full copyright goes to the companies above
38. Confidential | For Discussion Purposes Only |
Accounting for the $3 Billion In Mayer M&A
38
Acquisition Date Company Business Value
Oct-12 Stamped Social recommendation $3M
Dec-12 OnTheAir OnTheAir $4M
Jan-13 Snip.it Social network $10M
Feb-13 Alike Social recommendation $1M
Mar-13 Jybe Social recommendation $1M
Mar-13 Summly News aggregation, summarization $30M
May-13 Astrid Productivity $2M
May-13 GoPollGo Real-time surveys $1M
May-13 MileWise Flight rewards management $2.5M
May-13 Loki Studios Mobile gaming $1M
May-13 Tumblr Blogging $1,100M
May-13 PlayerScale Online gaming $1M
Jun-13 GhostBird Software Mobile Photography Apps $1M
Jun-13 Rondee Video Conferencing $1M
Jul-13 Bignoggins Productions Fantasy Sports $1M
Jul-13 Qwiki Automated Video Production $50M
Jul-13 Xobni CRM $60M
Jul-13 Ztelic Social Analytics $1M
Jul-13 Lexity ecommerce Analytics $35M
Aug-13 Rockmelt News Aggregator $70M
Aug-13 IQ Engines Image Recognition $4M
Sep-13 Hitpost Sports $2M
Source: Wikipedia; public reports; 10-K filings; Crunchbase VC $ raised
39. Confidential | For Discussion Purposes Only |
Accounting for the $3 Billion In Mayer M&A (Cont.)
39
Acquisition Date Company Business Value
Oct-13 Bread Advertising $3.5M
Oct-13 LookFlow Image Recognition $1M
Dec-13 SkyPhrase Natural Language Processing $1M
Dec-13 Ptch Video sharing $7M
Dec-13 EvntLive Live and on demand music playing $2.3M
Dec-13 Quik.io Cross Platform Video Streaming $1.3M
Dec-13 PeerCDN Content Delivery Network $1M
Jan-14 Aviate Intelligent homescreen for the Android OS $80M
Jan-14 SPARQ Mobile Marketing $1.7M
Jan-14 Cloud Party Virtual world gaming $1M
Jan-14 Tomfoolery Conversation platform $16M
Jan-14 Incredible Labs Time Management App $1M
Feb-14 Wander Social Diary $1.2M
Feb-14 Distill Technical Recruiting $1.3M
Mar-14 Vizify Social media information transformation $1.5M
May-14 Blink Mobile Messaging $1M
Jun-14 PhotoDrive Photo Management $1M
Jul-14 RayV Video Streaming Platform $16M
Jul-14 Flurry Mobile Analytics $300M
Aug-14 ClarityRay Ad Security $1M
Sep-14 Luminate Advertising $30M
Sep-14 Bookpad Document Handling $15M
Oct-14 LittleInc Messaging App $1M
Nov-14 BrightRoll Online Video Advertising $715M
Nov-14 Cooliris Photo Viewing $28M
Dec-14 Media Group One Advertising and online video $1M
Jul-15 Polyvore Clothing E-commerce website $230M
Source: Wikipedia ; public reports; 10-K filings; Crunchbase VC $ raised
Total: $2.8 Billion
40. Confidential | For Discussion Purposes Only |
A Tale Of Two Acquisitions: Instagram vs. Tumblr
40
Price Paid: $1B1
When: April , 20121
Users (Date of AcquisiMon): +30M (2012)1
Current Users: +400M3
EsMmated Revenue Today: $110m (2015)2
EsMmated Value Today: $35B (2014)3
Source:
1.WSJ, Insta-Rich: $1 Billion for Instagram, 2012.
2.Market Watch, Instagram Revenue Forecast To Triple, 2015
3. Citi Group; http://www.wired.com/2015/09/instagram-now-tops-400-million-users-40-billion-photos/
4. Fortune, Was Yahoo’s Tumblr acquisition a flop?, 2014
5. The Guardian, Tumblr audience up to 420m as Yahoo predicts $100m revenues in 2015
Price Paid: $1.1B4
When: May, 20134
Users (Date of AcquisiMon): ≈260M (2013)4
Current Users: ≈400M4
EsMmated Revenue Today: $100M (2015)5
EsMmated Value Today: $0 Implied
41. Confidential | For Discussion Purposes Only |
A Tale Of Two Acquisitions: Instagram vs. Tumblr
41
Current App Store Rank: #3
Highest App Store Rank: #1
Date of Highest Rank: Dec 26, 2014
How Long Ago?
Day after
Christmas
The Day Yahoo Bought Tumblr Was Virtually The Day Tumblr Started To Plummet In the App Store
Rankings
Current App Store Rank: #104
Highest App Store Rank: #12
Date of Highest Rank: June 21, 2013
How Long Ago?
1 Month Post-Yahoo
Buying
Source: SpringOwl Asset Management LLC
42. Confidential | For Discussion Purposes Only |
Mayer Has a History Of Buying Companies Run By
Former Google APM Members
42
Source: www.nytimes.com/2015/05/fashion/will-the-met-gala-make-fashion-love-yahoo.html
§ In 2003, Marissa Mayer started a program at Google called Associate Product Manager (APM)
§ The two-year rotational program was designed to flag the “best and brightest” at Google and give them increased
responsibilities as well as many travel opportunities and perks
§ Mayer oversaw the program while at Google and many considered her their mentor
§ And she’s created a similar program at Yahoo: http://yahooapms.tumblr.com/what-is-the-apm-program
§ A decade later, Mayer now has used Yahoo’s shareholders’ cash to buy companies run by former APM members
including:
Jess Lee of Polyvore
(standing in a tree):
a fashion website for $230 million
Paul Montoy-Wilson of Aviate:
a Google Now knock-off for $80
million
Enrique Munoz Torres:
was an early direct hire by Mayer and is
now SVP of Search (even though Yahoo
exited the Search biz in 2009)
43. Confidential | For Discussion Purposes Only |
It’s Not Acceptable To Pay $230M For Zombie
Companies Run By Former APM Members
43
Source:
1. http://www.businessinsider.com/polyvore-ceo-jess-lee-influenced-by-marissa-mayer-2015
2. http://www.bloomberg.com/news/articles/2015-08-03/yahoo-said-to-pay-230-million-for-shopping-site-polyvore
§ Polyvore was an 8 year old company
which has gone through multiple pivots
§ It raised $22M over 3 rounds and was
widely seen as a failure or part of the
Silicon Valley “walking dead”
§ Its CEO, Jess Lee, had known Mayer
since she joined Google’s APM program
more than 10 years ago and used Mayer
as a mentor
§ Anonymous sources have told us that no
Yahoo employees beyond Mayer wanted
to do this deal through Yahoo’s “deal
review” process
§ Mayer pushed for this deal at $230M even
though there’s no belief that Polyvore
deserves that valuation; Yahoo should
show its shareholders the Polyvore
financials and justification for this price
paid
44. Confidential | For Discussion Purposes Only |
No New Yahoo Products: The Livetext Fiasco
44
Image: Google Images
Source: www.nytimes.com/2015/05/fashion/will-the-met-gala-make-fashion-love-yahoo.html
§ The Livetext app was described by some at Yahoo as their Snapchat- and Instagram-killer
§ The app allowed you to text with someone and see their faces but not hear them
§ It was released on July 30, 2015
§ The day after its release, Livetext was ranked #132 on the App Store overall rankings but then quickly fell off the list
§ It is no longer on any App Store ranking
list
§ It’s unclear how much of this years nearly
$1 billion product development budget at
Yahoo went towards launching Livetext
but it was clearly unsuccessful
45. Confidential | For Discussion Purposes Only |
Yahoo’s Product on Snapchat Discover Was So
Bad, Snapchat Fired Yahoo 6 months After Launch
§ Snapchat Discover is one of the hottest new platforms for consuming news
§ Yahoo was one of a precious few launch partners on Discover on January 27, 2015
§ Inexplicably, Yahoo decided to make Katie Couric the face of their Discover channel
§ Jay Yarow of Business Insider immediately knew something was wrong1
§ 10 days after the launch, Eric Jackson pointed out in Forbes that this was a terrible decision by Yahoo2
§ 5 months later, Snapchat dropped Yahoo from Discover because the traffic was so low3
§ All the more embarrassing, the partner who replaced Yahoo on Discover – Buzzfeed – now gets 21% of its content traffic
from Snapchat Discover4
45
“This is not rocket science. What market research was done by Yahoo to
determine Katie Couric should be the face of them on Snapchat?”
- Eric Jackson, Feb 7, 2015, Forbes
Source:
1. https://twitter.com/jyarow/status/560097969475977216
2. http://www.forbes.com/sites/ericjackson/2015/02/07/why-is-katie-couric-doing-yahoo-news-on-snapchat-discover
3. http://adage.com/article/digital/snapchat-drops-yahoo-warner-music-discover/299682/
4. http://www.businessinsider.com/buzzfeed-gets-21-of-its-traffic-from-snapchat-2015-9
Note: Eric Jackson is a current employee of SpringOwl Asset Management LLC
Image: Google Images
46. Confidential | For Discussion Purposes Only |
Digital Magazines: OK But Not Moving The Needle
46
12.7M
17.6 17.2
14.8
13.6
12
10.5
9.8
6.7
ParenZng Health Style Movies Travel Tech Food Beauty
Traffic of Yahoo’s digital verMcals1
Monthly unique, in millions
§ Mayer has constantly pushed the idea of Yahoo’s ‘digital magazines”
as an example of a new Yahoo product which would lead the company
back to relevance. Yet, 4 years later the results are underwhelming
§ “ It’s not something that’s been on the radar” – Alan Smith, Chief
Digital Officer at Media Agency Assembly
§ Yahoo recently put Martha Nelson, previously longtime Time Inc.
senior editorial, in charge of its overall media strategy in August2
An Average of
Monthly Unique Viewers Vertical
Source:
1. http://digiday.com/publishers/yahoo-fails-impress-digital-magazines/
2. http://variety.com/2015/digital/news/yahoo-martha-nelson-media-1201626127/
3. http://adage.com/article/media/huffington-post-broke-146-million-revenue/299293/
4. http://www.buzzfeed.com/buzzfeedpress/buzzfeed-reaches-more-than-130-million-unique-visitors-in-no#.nuM0MZWDp
5. http://fortune.com/2015/09/29/facts-business-insider/
6. http://espnmediazone.com/us/espn-inc-fact-sheet/
200M Monthly Visitors3 180M Monthly Visitors4
72M Monthly Visitors5 17M Monthly Visitors6
47. Confidential | For Discussion Purposes Only |
Gemini: Still A Work In Progress
Gemini: What Is It?
In 2013, Yahoo introduced the world to “Stream Ads”. This was Yahoo’s first step towards creating its own native
advertising solution. Yahoo Stream Ads, which are designed to blend seamlessly into the content around it, are used in
personalized content streams across the Yahoo run sites
Yahoo said on December 9th that Gemini is now at a $500 million revenue run rate but has never given any financial
details to demonstrate this product's success and hasn't said how much of the $500 million run rate comes from
cannibalizing other Yahoo revenues
What People Familiar With the Gemini Product are Saying About It:
§ “It’s 3 years behind Facebook and Google”
§ “Why are they investing in Search and making search part of it?” “They don’t understand search”
§ “Until they reverse their user and engagement trends, their ad products don’t matter”
§ “They need to consolidate one ad tech platform like Google has AdWords. Cross-integrate it.”
§ “They have all the data they need but they don’t employ people to understand how to analyze it”
§ “The revenue they claim to have here replaced Display ads which were higher margin.”
§ “Flurry people are great at analytics but don’t understand how to monetize”
§ “We don’t understand why they recently renegotiated the Microsoft search deal the way they did”
§ “Why aren’t they building a Syndication Team to sell display ads for others?”
§ “For employing so many people, they don’t know a lot”
47
Source: SpringOwl Asset Management LLC
48. Confidential | For Discussion Purposes Only |
Yahoo Has Promised To Re-create Mobile Search
§ Yahoo has said that it thinks it can do mobile search better than Google
§ Yahoo’s search efforts are led by a former Googler: 34 year old Enrique Munoz Torres
§ Munoz is the SVP of Search even though ex-Yahoo CEO Carol Bartz outsourced Search to Microsoft in 2009 and all
Yahoo search staff left the company
§ Yet now, Munoz’s Search group is “one of the largest groups within the company”1
§ Munoz said his large group is trying to “figure out what search ought to mean”
§ Yet, his group has only been working on it since August
§ The product also reportedly will not be ready until 2017
§ If this search group is 3,000 people and it will take until mid-2017 to launch this product, it will cost the company
shareholders $1.5 Billion
§ We believe this is an inefficient use of shareholders’ capital
48
Source: 1. http://www.ozy.com/rising-stars/is-yahoo-really-trying-to-beat-google/65377
49. Confidential | For Discussion Purposes Only |
The Shift to Mobile:
Current Yahoo Apps In App Store Rankings
49
Yahoo
Search
Yahoo
Sports
Yahoo
Fantasy
Flickr
Yahoo
Finance
Only 2 Apps in Top 100 Overall:
Yahoo Mail Tumblr
§ Except for Tumblr, all apps pre-date
Mayer
§ According to TheInformation, Mail,
Tumblr & Search have 10 million DAUs to
its apps and mobile web properties; and
Fantasy and Sports crack 10 million
DAUs in the Fall and Winter
Source: App Store Rankings for iPhone as of 10/27/15; https://www.theinformation.com/whats-left-at-yahoo?shared=19695e
App Store Rankings For iPhone:
#39
#8
#78 #72
#5
Reference
Apps Rankings
Photography
Apps Rankings
Finance Apps
Rankings
Sports Apps
Rankings
Sports Apps
Rankings
50. Confidential | For Discussion Purposes Only |
And The Yahoo Apps Are Dropping Fast In iPhone
App Store Rankings
50
#79#7
Yahoo Mail
Today
#104#12
Tumblr
Today
Note: * One month aeer Yahoo paid $1.1B for it
As of 10/27/2015
Source: Apple App Store
#150#6
Yahoo Fantasy
Today
#150#6
Yahoo Sports
Today
Highest Ever
05/18/2015
Highest Ever
06/21/2013*
Highest Ever
09/06/2013
Highest Ever
05/20/2014
51. Confidential | For Discussion Purposes Only |
And The Yahoo Apps Are Dropping Fast In iPhone
App Store Rankings
51
#38#1
In News Category:
Today
#72#32
In Photography Category:
Today
Note: As of 10/27/2015
Source: Apple App Store
#78#23
In Search Category:
Today
#153#1
In Finance Category:
Today
Highest Ever
04/30/2015
Highest Ever
05/20/2013
Highest Ever
05/22/2015
Highest Ever
11/09/2013
52. Confidential | For Discussion Purposes Only |
Yahoo Hasn’t Made Shift To Mobile From Desktop
52
$1,024M
Facebook’s Mobile
Revenue
$165M
Twitter’s Mobile Revenue
“Not Material”
Yahoo’s Mobile Revenue
$2,965M
Facebook’s Mobile
Revenue
$406M
Twitter’s Mobile Revenue
$308M
Yahoo’s Mobile Revenue
$5,287M
Facebook’s Mobile
Revenue
$744M
Twitter’s Mobile Revenue
$485M
Yahoo’s Mobile Revenue
1H2013
1H2014
1H2015
9.6x Bigger Than Yahoo 1.3x Bigger Than Yahoo
1.5x Bigger Than Yahoo10.9x Bigger Than Yahoo
In Q315, Facebook’s mobile
revenue grew to 12.5x
Bigger than Yahoo’s1
Source: Company Fillings (10K) – 1- http://www.wsj.com/articles/yahoo-be-careful-playing-in-traffic-1449425043
53. Confidential | For Discussion Purposes Only |
Yahoo Still Lags Far Behind Its Peers In Mobile
53
1H2015 Mobile Revenue As % Of Total Revenue
20%
88%
74%
Source:
1. Company Fillings (10K)
2. http://www.emarketer.com/Article/Facebook-Twitter-Will-Take-33-Share-of-US-Digital-Display-Market-by-2017/1012274
54. Confidential | For Discussion Purposes Only |
Mayer’s Executive Compensation Package:
§ Mayer is on track to receive $365 million for 5 years of work at Yahoo if she stays on for another year and a half
(including her “Make Whole” payments for leaving Google) and the stock ends those 5 years at $40.34
§ The vast majority of that total compensation is based on Yahoo’s stock price which is effectively a proxy for the value
of Alibaba
§ The only component of her total compensation tied to Yahoo performance is the annual target bonus of $2 million or
$12 million over the 5 years or 3.3% of the $365 million total
54
Source:
1. http://www.forbes.com/sites/ericjackson/2014/08/17/marissa-mayers-compensation-and-stock-selling-not-linked-to-performance/
2. Company filings (10K & DEFA14)
55. Confidential | For Discussion Purposes Only |
Mayer’s Executive Compensation Package:
§ Base Salary: $1M annually = $5M
§ Incentive Compensation: $4M for first year and $2M thereafter = $12M
§ Annual Equity Awards:
• ½ in the form of RSUs = $77.2M
• ½ in the form of stock options = $26.1M already sold + $68.7M still held + $63.2M still to be granted =
$148M
§ Make Whole RSUs: $36M
§ One-Time Retention Equity Award: $77.2M
§ Other Perks:
• $25K for Mayer’s lawyers negotiating against Yahoo’s Compensation Committee
• $50K annually for personal security
55
Source:
1. http://www.forbes.com/sites/ericjackson/2014/08/17/marissa-mayers-compensation-and-stock-selling-not-linked-to-performance/
2. http://www.sec.gov/Archives/edgar/data/1011006/000119312512307595/d384719dex101.htm
3. Company filings (10K, DEFA14, and Employment Contract)
Grand Total for 5 years: $365M
Components of Mayer’s Expected 5 Year Compensation assuming stock price at $40.34/share:
56. Confidential | For Discussion Purposes Only |
Mayer’s Recent Stock Selling:
§ 7 months after Dan Loeb left the Yahoo
board, Mayer started using her stock
options, selling over $26 million worth of
Yahoo Stock Options
§ She characterized this selling internally
at an all-hands meeting as an example
of “good governance” because it was
part of a 10b5-1 plan, according to
someone at the meeting we spoke to
§ Selling is selling
56
Non-DerivaMve SecuriMes Disposed (10B5-1Plan) 1
Date Amount Bought Buying Price Amount Sold Selling Price Profit ($)
2/7/2014 36000 $18.87 36000 $36.83 $646,588.80
3/4/2014 36000 $18.87 36000 $39.53 $743,929.20
4/1/2014 36000 $18.87 36000 $36.34 $628,750.80
4/15/2014 36000 $18.87 36000 $33.69 $533,566.80
4/30/2014 36000 $18.87 36000 $35.86 $611,636.40
5/15/2014 36000 $18.87 36000 $33.79 $537,044.40
5/30/2014 36000 $18.87 36000 $34.56 $564,811.20
6/10/2014 36000 $18.87 36000 $36.04 $618,141.60
6/26/2014 36000 $18.87 36000 $33.60 $530,200.80
7/10/2014 36000 $18.87 36000 $34.86 $575,550.00
8/5/2014 36000 $18.87 36000 $36.10 $620,409.60
8/18/2014 36000 $19.87 36000 $37.51 $634,989.60
9/5/2014 36000 $18.87 36000 $39.37 $738,036.00
9/15/2014 36000 $18.87 36000 $42.44 $848,469.60
10/2/2014 36000 $18.87 36000 $40.00 $760,536.00
10/16/2014 36000 $18.87 36000 $37.77 $680,536.80
10/31/2014 36000 $18.87 36000 $45.89 $972,716.40
11/12/2014 36000 $18.87 36000 $50.55 $1,140,418.80
11/25/2014 36000 $18.87 36000 $51.79 $1,185,246.00
12/8/2014 36000 $18.87 36000 $49.45 $1,101,031.20
12/22/2014 36000 $18.87 36000 $51.16 $1,162,537.20
1/8/2015 36000 $18.87 36000 $49.64 $1,107,795.60
1/20/2015 36000 $18.87 36000 $47.62 $1,035,093.60
4/9/2015 250000 $18.87 200000 $46.00 $5,426,000.00
4/16/2015 125000 $18.87 100000 $46.00 $2,713,000.00
Total $26,117,036.40
Source:
1.Company Fillings (Form 4)
2.http://www.bloomberg.com/news/articles/2015-08-19/softbank-s-arora-to-buy-483-million-of-stock-as-personal-bet-
57. Confidential | For Discussion Purposes Only |
When Executives Buy Stock, Shareholders Win
§ Tim Armstrong invested $30 million of his own money in AOL stock
§ Nikesh Arora invested $483 million of his own money in SoftBank stock
§ Henrique De Castro was fired by Mayer 15 months after she hired him to be Yahoo’s COO; the total cost to Yahoo
shareholders was $109 million1
§ Neither Mayer nor De Castro has ever dug into his/her own pockets to purchase any Yahoo stock on the
open market
57
Source: 1. http://www.businessinsider.com/henrique-de-castros-compensation-2014-1
http://www.bloomberg.com/news/articles/2015-08-19/softbank-s-arora-to-buy-483-million-of-stock-as-personal-bet-
58. Confidential | For Discussion Purposes Only |
§ All Yahoo Employee’s receive a free iPhone
§ For Marissa Mayer’s one year anniversary at the company, she gave away 12,500 Jawbone UPs (where she is a
board member)
§ Earlier this year, Yahoo was the main sponsor of the Met Ball Gala for $3M to which only Mayer and a couple of
Yahoo executives attended1
Davos
$1-2M/Yr
Unnecessary Yahoo Perks Total Half An Instagram
58
Source:
1. www.nyZmes.com/2015/05/fashion/will-the-met-gala-make-fashion-love-yahoo.html
2. SpringOwl Asset Management LLC
IPhone 6
≈$9.3M
JawBone UP
≈ $2M
Met Ball
$3M/Yr
Free Food
$450M
§ Yahoo also sent Mayer by NetJets with a handful of Yahoo execs to attend Davos. Yahoo was a major sponsor. The
only other Internet company sponsors were Google and Facebook which are 100x the size of Yahoo’s core
business. Total costs were estimated between $1 – 2 million. What was the business case for the Met and Davos?
§ Mayer provides free food for Yahoo’s workforce. In Sunnyvale, it’s catered by the Uber-Luxe and organic Bon
Appetit. At 1.5 meals a day per employee, Mayer’s perk has cost $450M over 4 years. That’s half an Instagram right
there.
§ The world’s largest start-up? What start-up do you know that would spend $108 million a year of free food?
59. Confidential | For Discussion Purposes Only |
December 2014
The Party Is Still Going On…
59
Image: Twi]er & Google Images
Source: h]p://recode.net/2015/11/11/marissa-mayers-convoluted-yahoo-strategy-theres-no-place-like-home and ConfidenZal Sources`
Wizard of Oz Party Cost For
Just This Photo Shoot: $70K
Great Gatsby Holiday Party at Pier
48 in San Francisco Cost: $7M
December 2015
60. Confidential | For Discussion Purposes Only |
§ TheInformation: 15% of Yahoo’s top performers this year have quit of their own volition1
§ These aren’t the bottom performers leaving as a result of stack-ranking
§ These are the best and brightest at Yahoo voluntarily quitting
§ This is virtually unprecedented in the history of business and speaks to how poorly Mayer’s leadership must be
perceived internally
§ This is not sustainable; a change in CEO must be made now before the rest of Yahoo’s workforce votes with its feet
§ Yet, Mayer portrays these quits as if she and Ken Goldman orchestrated them:
I'd like to now speak about our Q3 results in the context of the key drivers of our business: people, products, traffic,
and revenue. Starting with people, we ended the quarter with 10,700 full-time employees and just under 800
contractors, bringing our overall head count down 14% year over year and down 32% over the current
management's tenure. We will continue to be disciplined on our head count and our thoughtful work on this area has
helped appreciably on expenses. – Mayer on Q315 Earnings Call
According to One Report, 15% of Yahoo’s Top Performers
Quit in 2015
60
Source: 1. https://www.theinformation.com/whats-left-at-yahoo
§ If Mayer wants to be measured on people, products, traffic, and revenue, she has failed miserably on all 4 over her
nearly 4 years
61. Confidential | For Discussion Purposes Only |
Search Traffic Mozilla and Oracle Deals Have
Helped Gross Revenues But Not Net Revenues
61
Source: Company Fillings (10Q)
1,086,821
1,040,365
1,093,960
1,042,831 1,043,035
1,002,444
Q1 Q2 Q3
2015 (Q1-Q3) Revenue Ex-TAC
2014 2015
($) In thousands
1,132,730
1,084,191
1,148,140
1,225,970 1,243,265 1,225,673
Q1 Q2 Q3
2015 (Q1-Q3) Revenue Inc-TAC
2014 2015 ($) In thousands
62. Confidential | For Discussion Purposes Only |
And $2.5 Billion Is Under-water on Stock Buybacks
From The Last 2 Years:
62
Total Buybacks
Year Shares Value AVG Price
2010 119,000,000 1,749,000,000 14.69
2011 27,476,742 416,272,641 15.15
2012 79,585,394 1,451,637,587 18.24
2013 6,350,973 231,302,437 36.42
2014 46,471,212 2,103,287,055 45.26
Total $278,884,321 $5,951,499,720 25.952
Current $YHOO Stock Price: 33.2
Value Destruction Per Share: 8.44
Total Value Destruction: $2,353,783,669.24
As of 10/25/2015
Note: Dan Loeb (Third Point LLC) quit Yahoo’s board on July 22,2013- Since then, all of Yahoo’s stock buybacks are under-water.
Source: SpringOwl Asset Management LLC
§ Since Dan Loeb left the Yahoo Board in July 2013, all of Mayer’s $2.5 billion in stock buybacks are under-water
63. Confidential | For Discussion Purposes Only |
1,000,000
919,000
885,824
1,008,487
1,207,146
1,221,691
2010 2011 2012 2013 2014 2015
Mayer Hired: July 2012
Marissa Mayer Should Only Be Judged on The
Performance Of Yahoo’s Core Business
63
22%
Note: As of 10/22/2015
Source: ISS Proxy Advisory Services
5-Year Development Cost Trend (2010-2015 LTM)In thousands
We will continue to be disciplined on our head count and our thoughtful work on this
area has helped appreciably on expenses.
– Marissa Mayer, Q315 Earnings Call
64. Confidential | For Discussion Purposes Only |
Marissa Mayer Should Only Be Judged on The
Performance Of Yahoo’s Core Business
64
Note: As of 10/22/2015
Source: Company Fillings (10K)
2,154,886
2,160,309
2,142,818
1,949,830
1,868,035
2010 2011 2012 2013 2014
Total Display Revenues (2011-2015)
3,161,589
1,853,110
1,885,860
1,741,791
1,792,861
2010 2011 2012 2013 2014
Total Search Revenues (2011-2015)
($) In thousands ($) In thousands
- 13%
- 43%
Mayer Hired: July 2012 Mayer Hired: July 2012
65. Confidential | For Discussion Purposes Only |
2012 2013 2014 2015
4-Year ex-TAC Revenue Trend (2011-2015 LTM)
Total Revenue Americas EMEA Asia Pacific
Mayer Hired: July 2012
65
Note: As of 10/22/2015
Source: Company Fillings (10K)
In thousands
- 3%
6%
- 22%
- 27%
Marissa Mayer Should Only Be Judged on The
Performance Of Yahoo’s Core Business
66. Confidential | For Discussion Purposes Only |
Yahoo Makes its Adjusted EBITDA Look Better
With the Aid of IP Asset Sales
66
§ Over the years, Yahoo has struck a
number of IP-related sales with
Alibaba and Yahoo Japan which it
has been recognizing as high
margin adjusted EBITDA.
§ If those gains are removed, the
profitability of the core business is
far less.
§ Yahoo’s termination of past
partnerships in the next few months
(TIPLA Deal, Sales of Patents, and
other IP asset Sales) will bring its
adjusted EBITDA back to reality this
year – with virtually no profits left.
$1,122M
Projected Adjusted EBITDA 20151
- $199M
TIPLA Amortization For 20151
- $253M Revenue From Yahoo Japan At
100% Margin
$1.5B
$1.1B
2011 Projected 2015 Correct 2015
Drop In Profitability
- 26%
- $80MAmortization of Other Patents
Sales1
$190MCorrect Adjusted EBITDA for
2015
- $400M
Stock Compensation
$190M
- 87%
Source: SpringOwl Asset Management LLC and Company Fillings (10K)
67. Confidential | For Discussion Purposes Only | 67
Starboard’s
“Sell At The Lows” Plan
Section IV
68. Confidential | For Discussion Purposes Only |
The Starboard Plan
68
§ Although Starboard previously advised that Yahoo spin-off its Alibaba stake, it recently suggested maintaining its
Alibaba and Yahoo Japan stakes and, instead, selling its core business:
• “The proposed spin-off of Aabaco Holdings, Inc. ("Aabaco Holdings") is not Yahoo's best alternative.
Instead, you should be exploring a sale of Yahoo's core Search and Display advertising businesses
("Core Business") and leave Yahoo's ownership stakes in Alibaba Group and Yahoo Japan in the
existing corporate entity.”
• Starboard argues that the market is currently valuing Yahoo’s core business at 2.2x trailing Enterprise Value to
EBITDA
• “…we believe Yahoo should hire a financial advisor to sell the Core Business as a taxable asset sale…”
• “We believe the current net cash of Yahoo and the cash generated from the Core Business sale can be
returned to shareholders in a tax efficient manner in some combination of share buybacks, returns of
capital, and dividends.”
Source: http://www.prnewswire.com/news-releases/starboard-delivers-letter-to-yahoos-chairman-ceo-and-board-of-directors-300181776.html
69. Confidential | For Discussion Purposes Only |
The Problems With Starboard’s Plan
69
§ Why sell the core business asset now when, by Starboard’s own admission, it is trading at an all-time low valuation?
§ We would prefer a buy low and sell high approach rather than the reverse.
§ While Starboard’s current stake in Yahoo is about $200 million, half of this stake was bought in Q315 likely when the
stock crashed below $28/share
§ Starboard’s most recently acquired stake in Yahoo is likely already well in the money; therefore, they are incented to
see a quick sale of the company for another $2 – 4/share
§ Longer tenured Yahoo shareholders would be better served with a plan to unlock $30/share in value and not $3/
share
70. Confidential | For Discussion Purposes Only |
Private Equity Has Tried To Buy Yahoo For Cheap
Before
§ In 2011, before Dan Loeb announced Third Point’s stake, it was reported that Silver Lake and Marc Andreessen
wanted to buy Yahoo for $16.50/share or $18 billion1
§ Many commentators on CNBC at the time said this price sounded like a “good deal” for Yahoo shareholders
because Yahoo was too hard to turn around
§ If Silver Lake/Andreessen had been successful, they would have received not only Yahoo’s Core Business, its $9
billion stake in Yahoo Japan, but also its then 44% stake in Alibaba which today would be worth $89 billion
§ When you hear people say that “Yahoo should be chopped up” by private equity because Yahoo is “hopeless”, what
they’re really saying is that Yahoo’s public market shareholders should do a wealth transfer to some private equity
LPs or public holders of companies like Verizon
70
Source: 1. http://allthingsd.com/20111130/yahoo-bidders-come-in-at-16-50-to-17-50-with-plan-to-keep-jerry-yang-staying-on-board/
It’s nonsense to think Yahoo can’t be turned around as a public company
71. Confidential | For Discussion Purposes Only |
Starboard’s “Sell At the Lows” Plan Isn’t Attractive
§ Starboard – a Yahoo shareholder – on Nov. 19/15 argued that Yahoo not spin off the Alibaba stake but instead sell the
core business
§ We don’t think their “sell at the lows” argument will be compelling to either the Yahoo board or other Yahoo shareholders
§ Yahoo’s stock didn’t increase at all the day after the letter was revealed; we believe that’s because Yahoo investors don’t
believe Starboard’s plan will work and/or won’t be adopted
§ We think Starboard’s credibility has been substantially weakened in taking this “sell at the lows” approach
§ We disagree with their projected cost savings estimates of $370 - $500M/year; we think at least $2B in annual savings
are possible from headcount reductions and cost cuts
§ While we agree with their estimates about the deterioration of the Core, we can’t understand why they would then
conclude that now is the time to sell off the core business at its lowest possible value
§ Starboard’s plan – at best – will get Yahoo shareholders an extra $3-4/share for their investment (Selling the core at $6B)
§ Our plan will deliver at least an additional $30/share of value to all Yahoo shareholders
§ The right turnaround plan and the right partner to help unlock the full value of Yahoo embedded in its current assets
§ A turnaround for public shareholders, not a fire sale for a return and strategies wanting to buy a great asset on the cheap
71
Source:
1. http://www.starboardvalue.com/publications/Starboard_Value_LP_Letter_to_YHOO_08.10.15.pdf
2. http://www.starboardvalue.com/publications/Starboard_Value_LP_Letter_to_YHOO_11.19.15.pdf
What Needs to Happen Now?
We Disagree With Starboard’s Suggestion Because:
72. Confidential | For Discussion Purposes Only |
The Downside Risk of Selling/Spinning The Core
72
Source: 1 h]p://www.thestreet.com/story/13391744/1/yahoo-shareholders-need-a-be]er-soluZon-than-the-one-just-proposed.html 2. h]ps://www.sec.gov/about/laws/ica40.pdf
§ Yahoo’s board announced on December 9th, 2015 that it won’t continue with the planned spinoff of its Alibaba
stake, as the potential tax bill for proceeding was too great a risk for the directors to assume that responsibility.
§ Instead, Yahoo’s board said it would being working on a plan to spin off the core business and the Yahoo Japan
stake
§ This would leave just the Alibaba stake as part of the Yahoo stock; the core Yahoo business and Yahoo Japan
stake would trade under another ticker
§ Some shareholders think Yahoo’s board is now simply going to sell the core
The Problem With Simply Selling Or Spinning The Core1:
Yahoo Shareholders Want $30/Share More – Not $3/Share And Full Tax On BABA
§ There is a risk – not a certainty – that if Yahoo Core is sold or spun, the stake in Alibaba would become taxable on
the gains from the time of Yahoo’s investment in 2005 to today under the Investment Company Act of 19402
§ Therefore, Yahoo shareholders would owe a tax bill on the gains of the Core as well as the BABA stake
§ Why not instead:
• Start the real turnaround of the Core with new management and a new board to create $20 – 30/share in
value for current shareholders?
• Study the tax issues in more detail with the help of a partner like a Liberty?
73. Confidential | For Discussion Purposes Only | 73
A Better Plan For Yahoo
Shareholders
Section V
74. Confidential | For Discussion Purposes Only |
"She tried. It's impossible. It's not her fault"
- @jonsteinberg, CEO of DailyMail.com North America on Mayer's efforts to turn Yahoo around on CNBC,
October 21, 20151
A Yahoo Turnaround for Yahoo’s Public
Shareholders
§ When Jerry Yang and David Filo agreed to take public shareholders’ money in 1996, they made a compact: any
future gains created by Yahoo would be shared with those public market investors
§ When you hear people say that “Yahoo should be chopped up” by private equity because Yahoo is “hopeless”,
what they’re really saying is that Yahoo’s public market shareholders should do a wealth transfer to some private
equity LPs or strategies.
§ It’s nonsense to think Yahoo can’t be turned around in public just because they haven’t for the past 4 years
74
Source: 1. h]ps://twi]er.com/carlquintanilla/status/656852009094615040
§ It’s not impossible at all, Jon. That’s like watching Shaq shoot a few free throws and concluding it’s impossible for
all NBA players to make free throws
75. Confidential | For Discussion Purposes Only |
Key Drivers to Unlocking Value In Yahoo’s Share Price
($B Unless Noted)
75
How Yahoo Is Valued By
The Market Today
(Asian Stakes Taxed at 38%)
Our Plan
46.11
9.61
CASH
REAL
ESTATE
CORE
1.82
24
Mkt Cap 81.2
25.7
4.3
1.82
18
44
$61.45
Difference Between
Starboard and Our
Plan
If our plan is implemented by the company and just the core business is fixed (with no additional improvement in the value of the Alibaba and YJ
stakes), we believe that Yahoo's stock would trade about $60/share or more than $30/share higher than the plan advocated by Starboard.
- =
PER SHARE $113.41
20.4
5.3
5.5
CASH
REAL
ESTATE
CORE
0
2.8
Mkt Cap 33.9
PER SHARE $35.91
716M Shares
Extra Value Created By
Starboard's Plan
20.4
5.3
5.5CASH
REAL
ESTATE
CORE
0
6
Mkt Cap 37.2
PER SHARE $39.41
1.5
$4B Cash
+
$1.8B Real
Estate
+
$4B Debt
Can Retire
228M Shares
At $43/Share
New Share
Count:
-4
Source: SpringOwl Asset Management LLC
Note: 1. Although Real Estate value is being realized, it is being used to retire shares.
2. Through working with a Liberty-like partner to realize tax efficiencies with BABA returning to $120/share and YJ increasing in value by 12%
76. Confidential | For Discussion Purposes Only |
Starboard’s Plan Sells Yahoo At The Lows; Our
Plan Unlocks Meaningful Upside for Shareholders
76
$35.00
$4.411
$22.462
$31.783
$23.474 $113.41
Current Price Starboard's Plan Core Business Asian Stakes Tax
Savings
Share Count
Reduction
Potential Total
ValueNote: 1 – Selling Yahoo Core now at the lows for $6B
2 – 8x EV/EBITDA Multiple for Core Doing $3B EBITDA ($750M Normalized EBITDA plus $2.25B in Headcount Reductions
3 – Through working with a Liberty-like partner to realize tax efficiencies with BABA returning to $120/share and YJ increasing in value by 12%
4 – Retiring 228 million shares at $43/share from $4B cash, $1.8B in real estate sales, and $4B in debt
Source: SpringOwl Asset Management LLC
77. Confidential | For Discussion Purposes Only |
Step One: Bring In An Operator As CEO
77
§ The status quo is not an option for Yahoo shareholders
§ $10 Billion in capital has been misallocated over the past 4 years
§ The board likely feels compelled to keep the current CEO because of the high compensation plan they previously
granted to her but new leadership is needed
§ The quickest way to increase the value of Yahoo’s shares is to do what should have been done 4 years ago and
dramatically reduce the headcount and costs of the company to something sustainable matching current revenues
and EBITDA
§ Such a move would help create the returns which Private Equity firms are counting on when they bid for the
company
§ Why shouldn’t Yahoo shareholders hire the operator CEO who Private Equity will hire themselves when they buy the
core business on the cheap?
Source: SpringOwl Asset Management LLC
78. Confidential | For Discussion Purposes Only |
Step Two: Replace A Number Of The Directors
78
§ This board lacks sufficient experience in tech and mobile
§ They have not exhibited enough “duty of care” to the shareholders for which they are supposed to be fiduciaries
§ They have not shown sufficient oversight and monitoring responsibility
§ They seem not to care that upper executives are leaving the company in droves; have they done exit interviews with
any of these departing executives? If so, they should immediately produce their notes to show shareholders for
whom they are working
§ Directors need to use the Yahoo products and be able to critique Katie Couric on Snapchat Discover
§ There needs to be a new board of directors selected to pick the next CEO; this new board needs sufficient
experience in the important areas of media, technology, digital, mobile and OTT
Source: SpringOwl Asset Management LLC
79. Confidential | For Discussion Purposes Only |
Step Three: Bring In Someone Like a Liberty As A
Partner
79
§ We would like to see someone like a Liberty Media come on to the Yahoo board as a partner for two reasons:
§ (1) We believe the board and shareholders could greatly benefit from tax advice relating to the sizable Alibaba
and Yahoo Japan stakes; We believe someone with the expertise like a Liberty would be able to aid in this
analysis and, over time, better unlock the value of these stakes rather than the current board making a quick
decision
§ (2) Liberty Media gets a 14x Enterprise Value to EBITDA multiple rather than the 2x which Yahoo currently
receives on its core business; We think having a partner like a Liberty on the Yahoo board would result in a
much higher multiple being given to Yahoo’s core business from the market
§ Someone like a Liberty would likely want to come on to the board through some sort of PIPE transaction and expect
to receive board representation
§ The potential tax advice benefits as well as a likely re-rating upwards in value to the Yahoo core business would still
make such an outside partner very attractive to Yahoo shareholders
Source: SpringOwl Asset Management LLC
80. Confidential | For Discussion Purposes Only |
Step Four: Take Headcount Down to 3,000
80
§ Marc Andreessen said on December 6, 2015 that Yahoo is still “dramatically overstaffed”
§ At present, the company admits it has just under 12,000 full-time employees and fixed term contractors
§ We suspect that with variable term contractors, this number is much higher
§ Its annual revenue ex-TAC is around $4 billion
§ Facebook has $15 Billion of revenue in the last year with 11,000 employees
§ Doing Yahoo-like revenue numbers would necessitate 2,900 employees.
§ Twitter had 3,700 employees and just announced they should fire 300 people because they had become bloated
§ They’re doing $2 billion in revenues now
§ Yahoo grew its headcount significantly in the mid- to late-00s when revenue was exploding
§ It then added to this headcount even after revenues started contracting
§ It needs to pull the band-aid off quickly and take headcount down to the appropriate levels given that it should get out
of search
Source: SpringOwl Asset Management LLC
81. Confidential | For Discussion Purposes Only |
Step Five: Milk the PC Biz But Focus on Finance,
Sports
81
§ Companies don’t die from too much focus; they die from too little
§ The last four years has seen Yahoo trying to do a little bit of everything
§ Yahoo should still milk its PC-based revenues (which still account for 80% of its revenues and more of its
unfortunately now non-existent profits) coming from Home Page/Mail for as long as it can; just as Tim Armstrong
milked AOL’s dial-up; but this should be done with the bare minimum of headcount required
§ However, more of an effort should be made to double down on the winners it possesses in Finance and Sports and
help invest in growing traffic
§ Yahoo needs more usable mobile apps for Finance and Sports; they also need to continue to invest in unique
content they can syndicate to others (like Buzzfeed does), show off partner content, and develop more helpful
portfolio tools
Source: SpringOwl Asset Management LLC
82. Confidential | For Discussion Purposes Only |
Step Six: End All Search Investment, Write Off Mayer
M&A, Cut Product Development Budget Dramatically
82
§ After 4 years of wasted investment and nothing to show for it, Mayer has recently promised to make a major
investment in reinventing mobile search
§ It’s another maddeningly wasteful use of shareholders’ cash
§ There’s a very low probability that Yahoo is going to recreate how people search on a mobile device
• Google and Bing have won that war; Yahoo lost
• It would be nice if history had gone differently for Yahoo, but it didn’t; and we all must live in reality now
§ The next CEO should focus on:
• Laying off all Yahoo staff trying to create a new type of search and simply relying on Yahoo outsourced search
deals with Bing and to some extent Google
• Writing off Mayer’s $3 billion in misguided M&A – According to Mayer and Goldman, it’s beneficial to Yahoo to
write off $42 million for content shows; therefore, it must be 72x more beneficial to Yahoo to write off $3 billion of
worthless M&A
• Mayer has increased product development costs significantly during her tenure and she’s now spent $4 billion
total over her tenure - but for what?
Source: SpringOwl Asset Management LLC
83. Confidential | For Discussion Purposes Only |
Step Seven: $10 Billion For Additional Buybacks
83
§ Buybacks for the sake of buybacks don’t create value
§ Yet, in the past 4 years, Yahoo has spent $3 billion on M&A, $4 billion on product development, and lost $2.5 billion
on stock buybacks since 2013 on prices higher than the current stock price
§ That’s a grand total of $10 billion spent for which Yahoo has little to show
§ Had they spent that money on buybacks in the first two years’ of Mayer’s tenure at an average cost basis of $20/
share, Yahoo could have retired 450 million shares or approximately half its total shares outstanding
§ That would mean that, even at today’s currently depressed market cap levels, Yahoo shares would trade above $65/
share instead of $35/share.
§ At present, Yahoo has net cash of $5.5 billion; we favor seeing them taking this cash level down to their historically
normalized cash on hand levels of $1.5 billion and using the additional $4 billion, plus another $4 billion in debt, and
$1.8 billion realized from real estate sales on additional buybacks under $45/share
§ This would reduce Yahoo’s share count by 24% to 716 million shares outstanding and potentially increase the value
of Yahoo’s stock by $23/share
Source: SpringOwl Asset Management LLC
84. Confidential | For Discussion Purposes Only |
Step Eight: Sale and Partial Leaseback of
Sunnyvale
84
§ Sunnyvale is a campus with 1 million square feet of office space
§ Yahoo owns the property outright
§ Comparable office space in the area leases for $80 – 100 per square foot
§ The underlying value of the land and office space is between $1.5 -1.8 billion
§ Yahoo could sell the space and lease back only the office space needed for a sharply reduced workforce
§ This step is by no means the most important for Yahoo’s future; to be clear, Yahoo must fix the problem of having a
bloated company and scattered and poorly articulated strategy
• However, $1.5 – 1.8 billion is real money and shareholders deserve to have their management team fighting on
their behalf at all times
• This additional capital can be used to retire additional shares
Source: SpringOwl Asset Management LLC
85. Confidential | For Discussion Purposes Only |
Step Nine: Look for Other Value Creation
Opportunities
85
§ No more free food to the tune of $450 million over 4 years
• Yahoo is like a start-up and start-ups can’t afford luxurious caterers like Bon Appetit
• No more lavish parties for employees like the Great Gatsby themed one in December
2015 costing $7M
§ No more wealth transfers of cash from Yahoo shareholders to boost the coffers of failed
zombie companies on whose boards the CEO sits
§ No more Met Ball or Davos sponsorships
§ Stomp out the practice of referring traffic off of the Yahoo homepage to external sites with no
chance for them to return; it’s great for the other sites sucking up Yahoo traffic and not so
great for Yahoo shareholders
§ Build out a syndication display ad business
§ Syndicate Yahoo unique content
§ Properly finish Ad Tech offerings or outsource to Facebook or Google
§ Go back to the old logo and raise the old Yahoo billboard on the 101 into San Francisco to
send a message that the era of Marissa Mayer is now over
Source: Confidential Interviews
86. Confidential | For Discussion Purposes Only |
The Needed Traits of the Next Yahoo CEO
86
§ Relevant Industry Experience in Tech/Digital/Media
§ A Willingness to go in and mercilessly cut costs to take it down to the studs and build it back up again
§ Sales Experience and an understanding of who to hire to build a performance-based sales culture
§ A willingness to fly to New York and Cannes and meet with advertising executives
§ An understanding of where the world is moving in OTT
§ Ad tech experience
§ An understanding of what Wall Street investors expect from management teams (i.e., the antiquated notion of
earning more than you spend)
§ No snobbery when understanding and embracing Yahoo’s core audience who lives in “fly over” country and not in the
bubbles of high society San Francisco and New York
87. Confidential | For Discussion Purposes Only |
Key Questions For Yahoo’s Next CEO
87
§ How do we culturally build in “Audience Growth” as part of the fabric of this organization?
• Buzzfeed has this engrained
• Yahoo doesn’t today
• Do we have the right content-analytics feedback loop in place?
• How do we get massive distribution for all our content?
§ Are we really going to build up Ad Tech or are we going to outsource it?
• If we’re going to build it, then let’s have a plan that can succeed and make us the 3rd largest player:
o We have a large audience
o We have some analytics from Flurry but we need much better monetization
o Let’s fill out the ad tech assets with a credible plan (so we don’t miss out buying future Drawbridge’s before
they’re too big)
o Let’s cross-integrate Gemini so we have one Ad Tech platform
• If we’re going to outsource it, fire people and pick someone to outsource it to (Google or Facebook)
§ Are we going to shut down, spin off or reinvest in Tumblr?
• The dreams of increased traffic being monetized didn’t pan out because of too much NSFW content
• Yet Yahoo could do much more with the asset than it has
• It can’t keep on in its current state of limbo
Source: SpringOwl Asset Management LLC
88. Confidential | For Discussion Purposes Only |
What The Next Yahoo CEO Shouldn’t Do
88
§ A Hail-Mary Expensive Acquisition That Won’t Be Successful
• Mayer’s big one was Tumblr; she bought it at the top and didn’t properly invest in the asset to make the most of it
• It would be a huge mistake if any CEO made a “bet the company” decision on buying an expensive property like
Pinterest and thinking that this one move will “save” Yahoo à This would be an expensive recipe for failure
• Big brands and flashy acquisitions won’t save Yahoo; Yahoo must save Yahoo
• Instead, Yahoo simply needs to focus on:
o Small, incremental changes that compound over time
o Grow the audience/stack organically
o Supplement this with very small acquisitions which make sense
Source: SpringOwl Asset Management LLC
89. Confidential | For Discussion Purposes Only |
Potential Buyers Of Yahoo Core?
89
§ We strongly believe in the future of Yahoo Core as a stand-alone business
§ If private equity is interested in buying it, you know that there is going to be an immediate wealth transfer from public
market investors to private equity LPs or strategics
§ That said, if necessary, we believe there would be a long list of strategic buyers for Yahoo Core, as the recent buy of
AOL by Verizon shows
§ We believe the list of potential buyers eager to buy the last remaining beachfront property available among digital
assets would include:
• AT&T
• Comcast
• Verizon
• Disney
• Fox
Source: SpringOwl Asset Management LLC
§ Any of these discussions will have to be held in concert with SoftBank and Alibaba, which is partly why we believe
someone like a Liberty would be a particularly helpful advisor here
90. Confidential | For Discussion Purposes Only |
Softbank Has $5.5B Reasons To Help Retire
Yahoo’s 35% Stake In Yahoo Japan
90
Net Income 133,933
Preferred Stock
Dividends
8.86
Basic Weighted
Average Shares
Outstanding
5,693
EPS (Basic) 23.5
Net Income 133,933
Preferred Stock
Dividends
8.86
Basic Weighted
Average Shares
Outstanding
3,700
EPS (Basic) 36.2
Values in Millions (Except for per share items) Values in Millions (Except for per share items)
Current Yahoo Japan EPS
Yahoo Japan EPS if Retired 35%
Shares Yahoo Owns
Source: Bloomberg
By retiring Yahoo’s stake, YJ Shares would go from Yen 500 to Yen 770 overnight
Softbank’s 43% stake would immediately jump in value from $9.5B to $15B
91. Confidential | For Discussion Purposes Only |
Summary of Yahoo Action Plan
91
Decide On:
1. Ad Tech / Gemini
2. Tumblr
Bring Back:
1. The Old Logo
Re-Invest In:
1. Sports
2. Finance
3. A New Audience Growth-Focused
Culture
4. A New CEO
5. A New Product-Focused Board
6. Smart small acquisitions
Milk:
1. PC biz (Home Page & Mail)
2. Search (Maximize MSFT
relationship)
Kill:
1. In House Mobile Search
2. Flickr
3. Long tail of Yahoo properties no one uses
anymore
4. Davos & Met Ball Sponsorships
5. Unprofitable Digital Magazines
6. The New Logo
7. Free Food & Perks
8. Bloated Headcount
9. Dumb Expensive M&A
Further Study:
1. Spin off of Asian stakes with help of a
Liberty like partner
1
2
3
4
5
6
92. Confidential | For Discussion Purposes Only |
Key Drivers to Unlocking Value In Yahoo’s Share Price
($B Unless Noted)
92
How Yahoo Is Valued By
The Market Today
(Asian Stakes Taxed at 38%)
Our Plan
46.11
9.61
CASH
REAL
ESTATE
CORE
1.82
24
Mkt Cap 81.2
25.7
4.3
1.82
18
44
$61.45
Difference Between
Starboard and Our
Plan
If our plan is implemented by the company and just the core business is fixed (with no additional improvement in the value of the Alibaba and YJ
stakes), we believe that Yahoo's stock would trade about $60/share or more than $30/share higher than the plan advocated by Starboard.
- =
PER SHARE $113.41
20.4
5.3
5.5
CASH
REAL
ESTATE
CORE
0
2.8
Mkt Cap 33.9
PER SHARE $35.91
716M Shares
Extra Value Created By
Starboard's Plan
20.4
5.3
5.5CASH
REAL
ESTATE
CORE
0
6
Mkt Cap 37.2
PER SHARE $39.41
1.5
$4B Cash
+
$1.8B Real
Estate
+
$4B Debt
Can Retire
228M Shares
At $43/Share
New Share
Count:
-4
Source: SpringOwl Asset Management LLC
Note: 1. Although Real Estate value is being realized, it is being used to retire shares.
2. Through working with a Liberty-like partner to realize tax efficiencies with BABA returning to $120/share and YJ increasing in value by 12%
93. Confidential | For Discussion Purposes Only |
Starboard’s Plan Sells Yahoo At The Lows; Our
Plan Unlocks Meaningful Upside for Shareholders
93
$35.00
$4.411
$22.462
$31.783
$23.474 $113.41
Current Price Starboard's Plan Core Business Asian Stakes Tax
Savings
Share Count
Reduction
Potential Total
ValueNote: 1 – Selling Yahoo Core now at the lows for $6B
2 – 8x EV/EBITDA Multiple for Core Doing $3B EBITDA ($750M Normalized EBITDA plus $2.25B in Headcount Reductions
3 – Through working with a Liberty-like partner to realize tax efficiencies with BABA returning to $120/share and YJ increasing in value by 12%
4 – Retiring 228 million shares at $43/share from $4B cash, $1.8B in real estate sales, and $4B in debt
Source: SpringOwl Asset Management LLC
95. Confidential | For Discussion Purposes Only |
Corporate Governance
95
Note: As of: 01 Apr 2015
Source: ISS Proxy Advisory Services
Board & Committee Summary Shareholder Rights Summary
96. Confidential | For Discussion Purposes Only |
Board Profile
96
Note: As of: 01 Apr 2015
Source: ISS Proxy Advisory Services
Director Independence & Affiliations
Executive Directors
Non-Executive Directors
97. Confidential | For Discussion Purposes Only |
Board Compensation Profile
97
Note: As of: 01 Apr 2015
Source: ISS Proxy Advisory Services
Director Employment, Compensation & Ownership
Compensation Profile
Executive Pay Overview
98. Confidential | For Discussion Purposes Only |
Equity Ownership Profile
98
Note: As of: 01 Apr 2015
Source: ISS Proxy Advisory Services
99. Confidential | For Discussion Purposes Only |
ISS Peer Groups
99
Note: As of: 01 Apr 2015
Source: ISS Proxy Advisory Services
Peer Groups
ISS And Company Disclosed Peer Groups
Peer Group Size Analysis