SpringOwl Activist Presentation Deck
Step Seven: $10 Billion For Additional Buybacks
Buybacks for the sake of buybacks don't create value
Yet, in the past 4 years, Yahoo has spent $3 billion on M&A, $4 billion on product development, and lost $2.5 billion
on stock buybacks since 2013 on prices higher than the current stock price
▪ That's a grand total of $10 billion spent for which Yahoo has little to show
▪ Had they spent that money on buybacks in the first two years' of Mayer's tenure at an average cost basis of $20/
share, Yahoo could have retired 450 million shares or approximately half its total shares outstanding
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▪ That would mean that, even at today's currently depressed market cap levels, Yahoo shares would trade above $65/
share instead of $35/share.
▪ At present, Yahoo has net cash of $5.5 billion; we favor seeing them taking this cash level down to their historically
normalized cash on hand levels of $1.5 billion and using the additional $4 billion, plus another $4 billion in debt, and
$1.8 billion realized from real estate sales on additional buybacks under $45/share
▪ This would reduce Yahoo's share count by 24% to 716 million shares outstanding and potentially increase the value
of Yahoo's stock by $23/share
Source: Spring Owl Asset Management LLC
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