Many Strategic Questions Remain for Yahoo! (YHOO) Following Abandonment of Alibaba Spin - Cowen

Cowen and Company affirms Yahoo! (Nasdaq: YHOO) with a Market Perform rating and $35 price target following asset spin-off news this morning.

Analyst John Blackledge summarized: This morning, YHOO announced that it will abandon the proposed Alibaba (BABA) spin originally slated for next month and that it will now pursue a reverse spin strategy. Concerns with a tax-liability overhang post-spin led to the change in course. While this near-term tax concern is alleviated, many strategic questions remain, in our view.

On the stock reaction: While the decision not to spin BABA relieves near-term questions about a tax liability attached to the BABA stake, investors are back at square one with a new process perhaps a year away. In the meantime, trends at the core business are yet to stabilize and we will learn more details about the recent strategic review at 4Q earnings in January.

For an analyst ratings summary and ratings history on Yahoo! click here. For more ratings news on Yahoo! click here.

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