SAN FRANCISCO: The United State’s pioneering search engine, Yahoo, has revealed that it will buy back $2 billion shares as the firm has speed up the efforts to re-invent itself.
According to a filing with the US Securities and Exchange Commission, the California-based company’s new share repurchase program approved by its board of directors will expire at the end of March 2018.
About $726 million remained in a $5 billion buyback program authorised in late 2013, and Yahoo will spend the remaining money by the end of next year, the filing indicated.
Yahoo executives have repeatedly stressed their intent to buy back shares and pay dividends with revenue flooding into company coffers from early investment in Chinese online commerce colossus Alibaba. Buying back shares also tends to bolster stock prices of public companies.
Yahoo bought a 40 percent stake in Alibaba in 2005 for $1 billion in a move credited to Yahoo co-founder Jerry Yang. Yahoo announced in January that it is spinning off its stake in the Chinese Internet giant, in a move that sidesteps taxes.
The strategy aims to deliver more cash for shareholders than an outright sale of the $40-billion stake by avoiding a hefty tax bill, and is meant to help refocus Yahoo under chief executive Marissa Mayer. Yahoo’s board authorized creation of an independent investment company called SpinCo to hold the Alibaba shares. SpinCo would be totally owned by Yahoo shareholders.
