Shares Of Yahoo Are Spiking: Here's Why

• Shares of Yahoo! Inc. YHOO were trading higher by more than four percent early Wednesday morning.
• The Wall Street Journal reported that Yahoo's Board of Directors are considering a potential sale of its core internet business.
• Citing ‘people familiar with the plans,' Yahoo's Board will also discuss its Alibaba Group Holding Ltd BABA stake,

Yahoo's stock gained more than four percent early Wednesday morning after The Wall Street Journal reported that the company's Board of Directors will gather Wednesday through Friday to discuss several strategic options available. The Wall Street Journal, citing "people familiar with the plans," noted that Yahoo's Board will discuss a potential sale of its core internet business. The source added that private equity firms could be eyeing Yahoo's core business and be interested in its portfolio of web properties. The Wall Street Journal also noted that a Yahoo executive recently canceled a scheduled appearance at an industry wide conference – fueling further speculation that major changes could be underway at Yahoo. The Board is expected to also discuss how to maximize value out of its $30 billion stake in Alibaba. The prior plan to spinoff the stake in a tax-free transaction may be in jeopardy as the tax-free nature of the transaction has been called into question. Nevertheless, Yahoo has indicated it plans to proceed with a spin-off – a move which may have irked a major shareholder. Activist investor and Yahoo shareholder Starboard Value urged the company to abandon its plans to spinoff Alibaba which could potentially result in billions of dollars in taxes. The firm argued Yahoo should proceed with finding a buyer for its internet business. Starboard Value said that it tried to work with Yahoo privately but the company's reaction has been "dismissive." Accordingly, the powerful activist investor hinted it would "look to make significant changes" to the company's Board if it continues to "make decisions that destroy shareholder value." SunTrust Robinson Humphrey's Bob Peck commented on Starboard's letter, noting that the "influential" investor's concerns are justified and the company will slow down or pause its proposed Alibaba spinoff.