NEWS
NEWS
NEWS
Report: Verizon asks for $1B discount on acquisition price after Yahoo hacking revelations
Verizon Communications Inc.’s takeover of Yahoo Inc. has taken an interesting twist, with reports the telco giant is asking for a $1 billion discount off the acquisition price following revelations that Yahoo was hacked.
The report came via The New York Post, which claims that the Verizon AOL chief Tim Armstrong, who would run Yahoo post acquisition, is “getting cold feet.” Sources say he is “pretty upset about the lack of disclosure and he’s saying can we get out of this or can we reduce the price?”
Yahoo first officially declared that over 500 million accounts were hacked late September, but subsequent reports suggested that the hack may have been as big as 3 billion user accounts. If that figure seems large, it should be remembered that Yahoo once dominated the internet in its early days.
“The discount is being pushed because it feels Yahoo’s value has been diminished,” the report noted. AOL boss Tim Armstrong is said to have flown to Yahoo’s headquarters in the past few days to meet with executives to hammer out a case for a price reduction.
“Tim was out there this week laying the law down and Marissa [Mayer, Yahoo’s chief executive] is trying to protect shareholders,” a source quoted by The Post claimed. “Tim knows how to be fair, while Verizon is pushing him, he can bridge the gap.”
Investigation
A drop in its acquisition price may be the least of Yahoo’s problems. One senator is asking the U.S. Securities and Exchange Commission to investigate whether Yahoo and its senior executives fulfilled obligations to inform investors and the public about a hack.
“Disclosure is the foundation of federal securities laws, and public companies are required to disclose material events that shareholders should know about,” Democratic Senator Mark Warner said in a letter to SEC Chairwoman Mary Jo White according to Reuters.
A potential SEC investigation into Yahoo would only further complicate matters post Verizon’s acquisition. Verizon potentially could become liable for any fines that could result.
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