Shares of Yahoo! are in the headlines this morning as the company formally announced that it will no longer spin-off its stake in Alibaba (BABA) due to potential tax ramifications. This news has been in the market for some time, so it isn’t a huge surprise. As a result of these issues, shares of Yahoo! have been under pressure for practically all of 2015, and are now down by a third from their highs late last year. Along with that decline, the honeymoon for Marissa Mayer’s tenure has really worn off.
The chart below shows the performance of YHOO since the start fo 2010. As shown, in the two years leading up to Mayer’s hiring, the stock was stuck in the doldrums in a range between $10 and $20 per share. Following that news, the stock began a steady trajectory higher and at one point was up 235%. The recent 33% decline in YHOO’s stock, however, has erased almost half of those gains, but the stock is still up well over 100% with Mayer at the helm. While up, the debate among investors is what percentage of the gain is due to Mayer and what percentage is due to BABA? That breakdown is up for debate, but with many analysts suggesting that YHOO’s market cap is pretty much equal to the value of its BABA stake and Yahoo! Japan, there are more than a few who would argue that Mayer is not responsible for any of the increase in YHOO’s market cap. At the same time, though, one could also argue that it could have been a lot worse had Mayer not been CEO.