Yahoo Says Sale to Verizon Will Close During Second Quarter of 2017
The company's $4.8 billion sale to Verizon was delayed by disclosures of two large security breaches.
As Yahoo continues to face repercussions of two massive security breaches that exposed information for at least 1 billion users, the internet company is reporting that its $4.8 billion sale to Verizon will be delayed until the second quarter of the year.
Yahoo last year disclosed that it had been the victim of two hacks. The company has said that one, going back to 2013, could have affected the information of more than 1 billion users, while the other, from 2014, impacted information of about 500 million users.
The Wall Street Journal reported Monday that the Securities and Exchange Commission is investigating Yahoo over whether it should have reported the hacks sooner. Meanwhile, Verizon executives have indicated that the breaches could impact the sale. Executive vp Marni Walden, who is overseeing the integration of Yahoo into Verizon's unit that includes AOL, said of the sale earlier this month, "Unfortunately I can't sit here today and say with confidence that one way or another, because we still don't know."
The company noted in its earnings report that its plans to close the deal in the first quarter of 2017 had been pushed to the second quarter, citing "work required to meet closing conditions" but including no mention of the security breaches. "The company is working expeditiously to close the transaction as soon as practicable in Q2," reads the statement.
Meanwhile, Yahoo continues to take the necessary steps to prepare for the sale. The company has disclosed that after the core internet assets are sold to Verizon, it will change the name of the remaining company assets — primarily its stake in Alibaba — to Altaba and CEO Marissa Mayer will step down from the board.
The updated timeline for Yahoo's sale to Verizon came as the company reported fourth-quarter earnings that beat Wall Street expectations. During the quarter, Yahoo had adjusted earnings of 25 cents per share and revenue of $1.47 billion. Wall Street was expecting Yahoo to report adjusted earnings of 21 cents per share and revenue of $1.38 billion, according to Thomson Reuters.
Investors hoping for any additional insight into the investigation or the sale will not be able to pose questions to Yahoo management on Monday, as the company is not hosting an investor call after releasing its earnings, citing its pending sale to Verizon.
Yahoo shares closed the day up less than 1 percent to $42.40. Shares were trading up about 1 percent during after-hours trading.