Struggling internet major Yahoo's chief executive Merissa Mayer may scrap the company's initial plan to pay its shareholders billion of dollars from the anticipated windfall gain later this year.
"Mayer is engaging in a review of the company's business strategy to enhance long-term shareholder value," Yahoo said in a regulatory filing with the Securities and Exchange Commission.
As part of the process, Mayer intends to review its previously announced plans for returning billions of dollars to shareholders from the sale of part of its stake in Alibaba Group of China.
The potential change, which was disclosed after market hours yesterday, caused Yahoo's stock to drop nearly 4% in extended trading.
The sale of part of its stake in thriving Chinese Internet company Alibaba Group, is likely to garner funds to the tune of $7.1 billion toward the end of the year for the struggling Internet company.
Out of over $7 billion, Yahoo pledged to distribute most of the anticipated after-tax proceeds estimated to be $4.2 billion to its shareholders.
The review process may lead to "re-evaluation of, or changes to, our current plans, including our restructuring plan, our share repurchase program, and our previously announced plans for returning to shareholders substantially all of the after tax cash proceeds" of the Alibaba deal inked in May, the filing said.
Mayer will conduct the review process, along with the board of directors, and will consider among other things, the company's growth and acquisition strategy, the restructuring plan that began in the second quarter of 2012, the company's cash position and planned capital allocation strategy.
On May 20, 2012, Yahoo had entered into a repurchase agreement with Alibaba Group to sell up to one-half of its stake, or around 20% of Alibaba Group's fully-diluted ordinary shares, at a minimum price of $13.50 per share.
Yahoo's decision to hire 37-year-old and soon-to-be mother Marissa Mayer, a key Google team member, as its new CEO was hailed as one of the most inspiring top-job stories worldwide.
