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Technology Stocks : Altaba Inc. (formerly Yahoo)
AABA 19.630.0%Nov 6 4:00 PM EST
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To: Bill Harmond who wrote (3168)11/23/1997 8:37:00 PM
From: Rational  Read Replies (1) of 27307
 
I checked the prospectus just now. Softbank cannot sell more than 5% of the company's stock without approval from Yahoo's board of directors unless the sale is pursuant to rule 144, or part of a company registration. (Page 53) That automatically gives Yahoo first right of refusal on a private placement of more than 4.99%.

I am not surprised about YHOO not permitting private placement beyond 5%. For YHOO or any buyer, a private placement is not economical.

As far as rule 144 goes, Page 55 says Softbank is prohibited from selling more than the greater of (i) 1% of the company's stock or (ii) the average weekly trading volume for the four weeks prior to the sale. They can do this only once in three months.

I think that "four weeks prior to sale" refers to a secondary offering of the YHOO shares by Softbank. That is, Softnank can sell about 1% in the open market prior to a formal "secondary offer" filing with SEC. This basically means that Softbank is prevented from secretly unloading shares in the market to get high prices and that price dicovery should be based on their formal intention to sell. This is an SEC design to make sure that new shareholders have full information that a large shareholder is selling, i.e., to have the new shareholders buy shares at the lowest possible price.

Sankar
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