Activist investor Starboard Value LP on Wednesday delivered a letter to Yahoo Inc. management, urging it to accept that major changes are needed at the company, including changes to management, the board composition, strategy and execution. "Despite over three years of effort and billions spent on acquisitions, the management team that was hired to turn around the core business has failed to produce acceptable results, in turn, causing massive declines in profitability and cash flow," Starboard wrote in the letter. Investors have lost all confidence in the management team and the board, the letter continued. Most of Yahoo's current value stems from its investment in Alibaba over ten years ago, "and the good fortune that Alibaba's management team has executed well such that this investment today is worth over $30 billion," it said. Yahoo's current market cap is about $30.5 billion. The current valuation is either a massive tax liability, or reflects the fact that the company's core business is worthless, or a combination of the two, it said. "We are confident that a separation of these assets can be accomplished through either a sale of the core business or a spin of the core business," it said. Yahoo shares fell 0.9% in premarket trade, and are down about 35% in the last 12 months, while the S&P 500 has gained 0.7%.
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