different forums, in different ways. We continue to retain all our fiduciary obligations, and weve announced this plan, but, if there were a proposal from them or someone else, to do
something differently, we couldwe could change course. So, you know, thatsthose sorts of transactions are not off the table by this announcement. If somebody, is interested in pursuing a transaction, then we would
absolutelyconsistent with our fiduciary obligations and it just makes sensewould consider that.
Joe Stauff
That makes sense.
Thomas J. McInerney
More broadly, I think, look, weve consideredand, again, some of these are listed in the proxy, and probably some have fallen by the wayside long
ago, but through the yearsreally, even going back to my days on the Yahoo Boardwe have considered a long list of alternatives, some of which that are quite esoteric, that were, in a sense, designed, or attempted to figure out a structure
that would get value into shareholders hands with either minimizing or eliminating corporate tax burden. A couple things happened. One is the tax rate dropped, the corporate rate dropped from 35% to 21%. We got a basis
step-up
in connection with the Tax Reform Act, that helped us, you know, to the point, of another point, effectively, or something like that, and so the bar that one had to get overbecause there was no simple,
easy straightforward thing. Anything we looked at had complexity and hair and may have, in some cases, required others to participate or not, and when the taxable alternatives got respectively better, then it was that much harder, and so, look, at
the end of the day, after literally years of looking at this, from the brightest tax minds in the world, candidly, not just our own advisors, but, as you can imagine, theres been plenty of unsolicited ideasIve met personally with
any, you know, banker, advisor who has an idea, Id say, Come on in, the door has been opened, and the reality is theres no tax magic bullet, if you will.
When you comparethat kind of covers that category of stuff. If you get to the issue of taxable alternatives, at the end of the day, the goal is to get
to our shareholders the, you know, assets that are closer to NAV, and the only one way to do that to conclusion, if theres not a transaction solution, thats this way. Theres no other way to sell the shares and buy back stock and
ultimately take the share count toto zero, if you will, because that just doesnt work from a corporate law perspective, from a creditor perspective. Ityou can do it only to a point.
We haveheres a fun fact, if you will. Weve reduced our share countpro forma, for the completion of the buyback program currently going
on, we will have reduced our share count from inception by 45%. So, weve significantly shrunk the capital of the Company. But, theres a limit to how much you can do that, just as a matter of practicality and law.
So, if thats the only ultimate outcome amongst the taxable alternatives, then you could say, Okay, is now the right time or should we do something
else first? Last summer, we reached, in a sense, a different conclusion, because we considered this amongst the many options last summer, and for the reasons I said at the time, we very much liked the exchange offer. It allowed us to more
quickly start the liability resolution discussions, it allowed us to give shareholders choice of liquidity sooner rather than later, etc. When we come back around to that decision, and any other alternatives around the table right nowand that
was, in a sense, the last one standing of the taxable alternativesdoing that would essentially just push off the ultimate capital return. Youd get a little bit of money more quickly perhaps, but on a time-weighted PV or IRR basis,
youre worse off. So, since this is the only way to ultimately get all of the assets to shareholders in an NAV way, and its the ultimate outcome, then it made sense at the current time to pursue it.
Hopefully, that helps.
Altaba Inc.
Wednesday, April 3, 2019
at 8:00 AM Eastern
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