Yahoo! (YHOO) Shareholders: Buybacks > Dividends

According to Bloomberg, Yahoo! (Nasdaq: YHOO) shareholders are opting for the company to repurchase outstanding shares with its recent Alibaba Group haul rather than pay out a dividend. The main reason is that it would show management still has confidence in the company under Mayer's leadership. With a dividend, investors might see the gesture as a hold-over until some new ideas pop up.

One Gabelli analyst agreed, saying Yahoo! could rise to $32 per share over the next 12 months.

Yahoo! recently said it would set aside $3.65 billion to return to shareholders from the Alibaba deal, with $646 million already having been put to stock buybacks. That leaves about $3 billion still up in the air. Yahoo! has typically conduction rather robust buybacks, starting with $500 million in 2001 and rising to $3 billion for three authorizations thereafter, according to Bloomberg-compiled data.

Investors are looking for anything to give the stock a confident lift. Shares are higher since Mayer took over the company, but the stock is still flat when looking back over the last year, hovering in that mid-$16 range.

In early trading, Yahoo! is about 0.6 percent lower Monday.

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