Yahoo bids are coming in way lower than expected

Yahoo might be worth a whole lot less than anyone thought.

The beleaguered technology company’s core business is up for sale after years of lacklustre performance, with bidders including frontrunner Verizon, inventor Dan Gilbert (backed by Warren Buffett), TPG, and a consortium that includes Bain Capital and former Yahoo CEO Ross Levinsohn.

The Wall Street Journal reported on Thursday, citing people familiar with the matter, that the bids were expected to be $2 billion (£1.3 billion) to $3 billion (£2 billion) — significantly less than previously expected.

The range is less than half the $4 billion to $8 billion that was expected in April. And it is far, far below Yahoo’s $35 billion (£24 billion) market cap. Much of Yahoo’s value, however, is derived from its stake in the Chinese e-commerce company Alibaba.

It’s also worth keeping in mind that this is an auction — bidders will naturally downplay their interest in the hopes of getting a better price.

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But still, it’s a sign of how far Yahoo has fallen. Back in 2008, Microsoft tried to buy Yahoo for $45 billion — more than 10 times the figures being thrown about now.

The Journal reports that the deadline for this round of bids in the first week of June.


Read the original article on businessinsider.

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