Nomura Securities Cuts Price Target on Yahoo! (YHOO) Following IRS Decision on Private Letter Ruling
Nomura Securities maintained a Buy rating on Yahoo! (NASDAQ: YHOO), and cut the price target to $40.00 (from $48.00). following the IRS' decision not to grant a private letter ruling,” which would have provided a clear path for the completion of Yahoo’s proposed tax-free spinoff of Yahoo’s Alibaba stake and Yahoo Small Business into the newly formed “Aabaco”.
Analyst Anthony DiClemente commented, "Yesterday after the close, Yahoo announced that as of September 2nd, the IRS had “determined, in the exercise of its discretion, not to grant a private letter ruling,” which would have provided a clear path for the completion of Yahoo’s proposed tax-free spinoff of Yahoo’s Alibaba stake and Yahoo Small Business into the newly formed “Aabaco”. On the face of it, this represents an incremental concern, but the IRS concurrently indicated that it had not concluded the proposed spin was definitively a taxable transaction, and that it was not ruling “adversely on the request.” In our view, the announcement only modestly reduces the ultimate probability of a successful tax efficient spin-out of Aabaco from YHOO."
For an analyst ratings summary and ratings history on Yahoo! click here. For more ratings news on Yahoo! click here.
Shares of Yahoo! closed at $30.90 yesterday.