Shares of Yahoo, a company known for its venerable brand, former search market share, and current attempt to become a key mobile shop, fell sharply at the end of trading today. Off more than 7 percent in regular hours, Yahoo took a dive after reports surfaced that the IRS may change how it taxes spinoffs.
That matters for Yahoo, a company that has plans to spin-off its stake in Alibaba, a valuable Chinese e-commerce play in which it purchased a large interest for $1 billion years ago. The company retains a large quantity of equity in Alibaba, shares that are now liquid following the latter firm’s public offering.
According to Bloomberg, an IRS employee “said on Tuesday the government agency is considering changes to rules concerning spinoffs.” If the changes impact Yahoo’s strategy to spin its Alibaba shares into a separate company, or in any way lowers the value of…
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