Yahoo Returning $3.65 Billion to Shareholders, but in Buybacks or Dividends?

Yahoo CEO Marissa Mayer has decided what to do with most of the money it made from the divestiture of its Alibaba stake: Return it to the company’s shareholders.

Yahoo said it will return approximately $3.65 billion in after-tax proceeds to shareholders. That’s about 85 percent of what it made on the deal. It will keep the remainder, about $650 million. “This outcome is terrific for Yahoo,” Yahoo CEO Marissa Mayer said in an all-hands memo to employees. “It generates liquidity to create substantial value for our shareholders, while retaining a meaningful amount in the company to invest in our future. Also, because we still own 23 percent of Alibaba’s common stock, we have the opportunity to benefit from future upside when Alibaba IPOs.”