Yahoo Shares Down on New Doubts About Verizon Sale

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Lowell McAdam

The internet company disclosed Wednesday that a second hack had affected 1 billion user accounts.

Yahoo's stock is down more than 4 percent during morning trading following a new report that Verizon is considering backing out of its $4.83 billion deal to acquire the internet company. 

Yahoo on Wednesday disclosed that a hack that took place in 2013 had compromised the information of more than 1 billion user accounts. It's the Marissa Mayer-led company's second such disclosure since September, when it reported that a 2014 breach had impacted at least 500 million accounts. 

Now, Bloomberg is reporting that Verizon is exploring asking for a discount on its original offer or backing out of the deal entirely. According to the report, which sites an unnamed source, Verizon has a team separate from its integration team that is reviewing the details of the breach and its options. One sticking point is negotiating a deal in which Verizon will not assume any liability for the lasting effects of the breach. 

Verizon, which is led by CEO Lowell McAdam, on Wednesday released a statement saying, "As we've said all along, we will evaluate the situation as Yahoo continues its investigation. We will review the impact of this new development before reaching any final conclusions." 

A Verizon spokesman declined to comment on Thursday morning. 

After a months-long bidding process over the sale of Yahoo, Verizon emerged in July as the winning bidder, announcing plans to merge the flagging internet giant with AOL. Executive vice president Marni Walden and AOL CEO Tim Armstrong have been leading that integration. Although the initial hack disclosed in September prompted concern over whether the deal would close, Armstrong told attendees of the Business Insider Ignition conference on Dec. 5 that he was "cautiously optimistic" that the acquisition would be finalized. He did acknowledge that the breach had "slowed things down a bit." 

Macquarie Capital analyst Amy Yong said in a report on Thursday: "Combined AOL-Yahoo would be the third-largest ad tech platform behind Google and Facebook. However, [the] announcement that 1 billion accounts were hacked could impair the asset's value and add a wrinkle in the growth trajectory."

She added: "It could also open the search for other digital assets. Consequently, it's not shaken by AT&T's DirecTV Now or pending deal with Time Warner."

Georg Szalai contributed to this report.