Yahoo might be worth a whole lot less than anyone thought.
The beleaguered technology company’s core business is up for sale following years of lacklustre performance, with bidders including frontrunner Verizon, inventor Dan Gilbert (backed by Warren Buffett), TPG, and a consortium that includes Bain Capital and former Yahoo CEO Ross Levinsohn.
The Wall Street Journal reported on Thursday, citing people familiar with the matter, that the bids are expected to be significantly less than previously expected — between $2 billion (£1.3 billion) and $3 billion (£2 billion.)
That’s less than half the $4-8 billion range that was expected in April. And far, far below Yahoo’s $35 billion (£24 billion) market cap. Much of Yahoo’s value is derived from its stake in Alibaba, however.
It’s also worth bearing in mind that this is an auction — bidders will naturally downplay their interest in the hopes of getting a better price.
The WSJ reports that the deadline for this round of bids in the first week of June.