Yahoo’s Alibaba spinoff could be delayed until January

Splitting up.
Splitting up.
Image: AP Photo/Elizabeth Dalziel
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Yahoo CEO Marissa Mayer is ready to put this Alibaba spinoff behind her.

In a call with investors today (Oct. 20), Mayer said the company is “striv[ing] to complete the spin in Q4.” But external factors—including board approvals, regulatory processes, and holiday market closures—could delay the completion of the deal to January.

“Believe it or not, we can see the goal line, so we are very confident relative to that,” said chief financial officer Ken Goldman. “I can assure you we have all hands on deck—whether it’s the management team, the board, and so forth—to achieve this and to achieve a positive outcome in the timeframe that we established for this spinoff.”

Yahoo, which owns 384 million shares of Alibaba, said in September that it would proceed with a proposed restructuring plan that it believes would allow it to spin off its stake in the Chinese ecommerce company without incurring any taxes.

Whether or not the deal will actually go through tax free is still uncertain, since the US Internal Revenue Service (IRS) declined in September to rule privately on the matter ahead of the transaction. But Yahoo, under the guidance of its tax and legal advisors, believes the spinoff will not incur any taxes under existing laws.

If all goes accordingly, this will bring closure to a deal investors have been closely watching all year—and Mayer herself said she was looking forward to a “post-spin 2016.” However, all that waiting has come at a cost. In January, when Mayer first proposed the spinoff plans, Yahoo’s Alibaba stake was worth $40 billion. The value of those shares has since fallen 30% to $28 billion, largely due to the Chinese market crash.