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  • November 2013 (Revised October 2015)
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Valuing Yahoo! in 2013

By: Luis M. Viceira and Atul Khosla
  • Format:Print
  • | Language:English
  • | Pages:28
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Abstract

In late July 2013, Danielle Engle, Managing Director of Clairemont Capital, was contemplating what to do about a large investment her fund had in the stock of Yahoo! Inc. In mid-2012, Clairemont had invested nearly $75M in Yahoo! after the tech company settled a highly visible proxy fight with prolific activist investor Daniel Loeb of hedge fund Third Point. Since that time, Loeb and his colleagues had joined the board, the company had hired a new CEO and the stock price was up nearly 80%—increasing the value of Clairemont's investment by $60M in less than a year. But Yahoo! had just announced an agreement to buy back two-thirds of Third Point's stake in the company. It had also announced that Loeb and two other company directors appointed at his request would step down from the board. At the same time, Alibaba, the giant Chinese e-commerce company of which Yahoo! owned a sizable stake, was widely expected to go public in the near future. What should Clairemont Capital do with its investment in Yahoo! in response to this news? This case provides students with opportunities to discuss shareholder activism, the interaction between a company growth strategy and business model and its valuation, discounted cash-flow valuation analysis, multiples valuation, transaction-based valuation, and company valuation by parts.

Keywords

Investment; Decision Making; Investment Activism; Business Model; Growth and Development Strategy; Valuation

Citation

Viceira, Luis M., and Atul Khosla. "Valuing Yahoo! in 2013." Harvard Business School Case 214-048, November 2013. (Revised October 2015.)
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About The Author

Luis M. Viceira

Finance
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Related Work

    • March 2015
    • Faculty Research

    Valuing Yahoo! in 2013

    By: Luis M. Viceira and David Biery
    • March 2015
    • Faculty Research

    Valuing Yahoo! in 2013

    By: Luis M. Viceira and David Biery
    • November 2013 (Revised October 2015)
    • Faculty Research

    Valuing Yahoo! in 2013

    By: Luis M. Viceira and Atul Khosla
Related Work
  • Valuing Yahoo! in 2013 By: Luis M. Viceira and David Biery
  • Valuing Yahoo! in 2013 By: Luis M. Viceira and David Biery
  • Valuing Yahoo! in 2013 By: Luis M. Viceira and Atul Khosla
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