Yahoo set to spin off its stake in Alibaba

The decision, which Wall Street has been waiting for since Mayer joined the company in 2012, cheered shareholders since they will directly reap all the remaining profit from Yahoo’s prescient investment, which cost virtually nothing a decade ago but is now worth about $39.5 billion.

The Alibaba stake alone now makes up nearly 85 percent of Yahoo’s market value.

“Throughout my tenure with the company, we have worked tirelessly on a tax-efficient alternative that would maximize the value of our Alibaba investment for our shareholders,” Mayer said in the spin off release. “A tax-free spin off accomplishes this and delivers value directly and exclusively to our shareholders.”

The immediate reaction to the announcement was positive, with investors driving Yahoo’s stock up about 6 percent in after-hours trading after disclosure of the plan.