Advertisement

Verizon Communications (NASDAQ:VZ) Inc. Seeking Price Discount From Yahoo! Inc. on Data Breach Lombardi Letter 2017-11-28 02:20:46 Yahoo! Inc. technology security Verizon VZ stock NASDAQ:YHOO VZ stock price VZ share price Verizon (NASDAQ:VZ) is seeking a billion-dollar discount off its pending $4.8-billion agreement to buy Yahoo!. News,Stock Market,Yahoo! Stock https://www.lombardiletter.com/wp-content/uploads/2016/10/Verizon-Yahoo-deal-150x150.jpg

Verizon Communications (NASDAQ:VZ) Inc. Seeking Price Discount From Yahoo! Inc. on Data Breach

Yahoo! Stock - By |
Verizon-Yahoo-deal

Media Reports Cite Sources on Price Re-Negotiation

The fallout from the Yahoo! Inc. (NASDAQ:YHOO) disclosure that hackers stole data of its more than 500 million subscribers isn’t over.

In fact, this may jeopardize the company’s future; Verizon Communications Inc. (NASDAQ:VZ) is allegedly seeking a $1.0-billion discount off its pending $4.8-billion agreement to buy Yahoo!. (Source: “Verizon wants $1 billion discount on Yahoo deal after reports of hacking, spying,” Marketwatch, October 7, 2016.)

Advertisement

The problem Yahoo! has been facing since last month’s announcement that government-backed hackers had gotten access to its customer database is just one of the many issues that have hit Yahoo!’s credibility in recent days.

For Verizon, the Yahoo! deal is crucial in establishing its footprint in digital advertising with Yahoo!’s more than one billion monthly active users—including 600 million monthly active mobile users. (Source: “Verizon to acquire Yahoo’s operating business,” Investor Relations, Verizon, July 27, 2016.)

The media reports on Verizon seeking a discount from Yahoo! on its buyout announced in July haven’t been confirmed or denied by either company. But unnamed Verizon sources cited in these reports seem quite adamant in squeezing some benefit from Yahoo!’s public fiasco.

The biggest reason being cited for this alleged $1.0 billion discount is that Verizon wants to set aside money for potential public litigation in the future, and nobody is sure how long this issue will drag on.

verizon stock

Credits: Flickr.com/MikeMozart

“In the last day we’ve heard that Tim [Armstong] is getting cold feet. He’s pretty upset about the lack of disclosure and he’s saying can we get out of this or can we reduce the price?” the media report said, citing a source familiar with Verizon’s thinking. (Source: “Verizon wants $1 billion discount on Yahoo deal after reports of hacking, spying,” Marketwatch, October 7, 2016.)

The report adds that, according to its sources, at this point Yahoo! isn’t willing to renegotiate the price with Verizon because the deal doesn’t allow such bargaining.

Yahoo! stock was trading at more than one percent down in New York on Friday, after surging more than 65% since this March on optimism that the Verizon buyout will end years of uncertainty in its business. Verizon stock also declined about one percent on Friday, deepening its losses last week to about four percent.

Related Articles