The End of Yahoo?

Yahoo said on Wednesday it had shelved plans to spin off its stake in Chinese e-commerce giant Alibaba Group Holding, citing tax concerns, and will instead create a separate company to hold the rest of its assets.

The new publicly traded company will house Yahoo’s Internet business and its 35 percent stake in Yahoo Japan, giving investors a clearer view of the company’s core business.

However, the plan – which may take a year or more to conclude – adds another layer of uncertainty to Chief Executive Marissa Mayer’s efforts to revive the struggling company.

Yahoo had intended to spin off its Alibaba stake, worth more than $30 billion, by January.

Yahoo, which has a market capitalization of about $35 billion, owes almost all of its valuation to its 15 percent stake in Alibaba and its holding in Yahoo Japan.

The company has struggled to grow its Internet business, which includes selling search and display ads on its news and sports sites and email service, in the face of competition from Alphabet’s Google and Facebook.

But Yahoo.com still ranks fifth in terms of daily visits, according to monitoring firm Alexa, and this could make it an attractive target for a telecom carrier or private equity.

“A separation from our Alibaba stake, via the reverse spin, will provide more transparency into the value of Yahoo’s business,” Mayer said in a statement.

Shares of Yahoo, which will remain publicly traded, were up 1.9 percent at $35.51 before the opening bell.

Mayer had planned to use the proceeds from the sale of the Alibaba stake to focus on expanding the company’s mobile, video and social media offerings. Read the complete story here…

My Take On This;

From my observation, it seems here that it’s not Yahoo!’s fault that they have no idea what the IRS will do regarding Yahoo!’s spin-off of their Alibaba stake. For one, the IRS is sounding like somewhat of a financial kid here saying ‘well we’re not giving you a guarantee that it’ll be a tax-free transaction, but ah—you know we’ll think about it–NOT!’

This to me is a very childish way of communicating with a business where the CEO has to make a strategic decision that could affect the entire personnel and their family’s financial well-being, and the entire financial landscape in American business. Basically, if this is how the IRS communicate with Yahoo! where a decision by the CEO is doing her best to make solely based on the IRS’s decision, then how will other corporations see the entire regulatory and tax environment of the United States government period?

Again only speculating, but I’m wondering if the entire corporate world is looking at this theater between Yahoo! and the IRS and that justifies the intense M&As (mergers & acquisitions) that has happened throughout 2015, and are preparing for a lot of “undecided decisions” from the IRS.

The Bottom line:

For the record, I have no problems with the IRS, it is a service on behalf of the people as long as they agree with the government (paying and filing taxes annually) taking the fruits of their labors, and fighting over who pays a fair share of their income to taxes. The IRS is a derivative of the people, and the government is only a reflection of its own people. You can tell a society based on its government, so when you have a society who knows nothing about money, finance, or business period, they show that lack of understanding through the government and in this case the IRS.

So what’s the solution? Well first the solution is yourself, that’s where it starts. You have to ask yourself what if you were Yahoo, and its CEO? What would you do?

Next, you have to ask yourself what if you were the IRS and its agents? What would you do?

Your answer will be based on who you are as a person based on what you believe in and what you stand for. However make sure it’s YOUR organic belief. The most dangerous belief is in someone else belief that has nothing to do with you, therefore you’ll fall for anything. But what is it that you really believe in deep down inside?

I’ll share you mine real quick regarding money and business; I believe that a person’s labor is their birthright to express your talent and for you to enjoy the fruits (income, compensation) of that talent/labor without any theft or confiscation from anyone else including government via income taxes.

The federal income tax is a complete contrary to my beliefs, therefore I do the necessary options in order to legally abide by my beliefs and what I stand for. I also don’t mind paying taxes on things that I consume because I choose to pay taxes when I buy. I voluntarily make a transaction of goods and services I wish to use and enjoy, and in exchange I pay the government taxes.

So what does this have to do with Yahoo!? A lot. Yahoo! is an American company dealing with a counterproductive 70 thousand plus page tax code infested with so many loopholes and penalties that cost American businesses and individuals over half a trillion dollars to comply with annually. It’s so complicated, that twenty people called the IRS to ask one tax related question and got twenty different answers.

Is that insane, or is that a great tax system? There’s no right or wrong answer here.

Whatever the answer is, it’s being given to each and every one of us every election–every politician who has stated if one class of people “earn” X amount of dollars a year, their tax goes up or down by X amount” and they get elected. Therefore, the business community makes an informed decision to either cut back on hiring, raising wages, production, or just flat out relocate.

A Document That Represent A Principle:

I won’t go as far as equating this law to the Declaration of Independence, but I will say it’s one of the most freedom reminding legislation I’ve ever seen in my life and might be in modern history. I believe if this legislation was in existence right now, Yahoo! and many other businesses large and small wouldn’t have to make “tax decisions”, but “productivity decisions”. Because time is money, it’s extremely counter-productive and a waste of time when a corporation has to put their energy and heads together to figure out what the IRS going to see a transaction and how to avoid certain taxes instead of focusing on how many American workers they can hire to express their talents to produce a great product and service the consumers (all around the world) can buy and enjoy.

Now let’s picture for a second that based on Yahoo!’s decision of avoiding a massive tax on its Alibaba spin-off, they had $60 billion on the line. What if Yahoo! was making a decision based on growing productivity instead of a tax strategy? What would that $60 billion be used for? I’ll let you answer that question, for whatever your answer is would be what you would do if you were Yahoo!

We can only speak for ourselves and our intentions, no one else. However, if you know what they would do with the $60 billion if there were a FairTax, then you have the ability to either “put” or “short”, buy or sell their stock based on your answer. Right?

$60 billion is a huge chunk of change. Now imagine how much would you have if you took every single tax withheld in your paycheck and erased it. In other words, you take all the money deducted before your net pay, and you take it all back. There’s your instant raise before your company  have even considered it.

There you go Fight For $15 crew.

So What’s your thoughts on this?