Yahoo investors appear to be unmoved this morning by a story saying that Verizon, concerned about disclosures that the internet company failed to protect users’ privacy, wants to slash $1 billion from its $4.83 billion acquisition deal.
Yahoo’s stock price is down less than 1% after the New York Post reported that Tim Armstrong from Verizon-owned AOL recently met with Yahoo executives to argue for a price cut. The company’s said to be resisting, saying it wants to stick with their agreement.
The meeting follows Yahoo’s announcement last month that in late 2014 a “state-sponsored actor” stole about 500 million users’ information including names, passwords, email addresses, birth dates, and — in some cases — answers to security questions.
And this week Reuters disclosed that last year Yahoo searched hundreds of millions of users’ emails for information that the National Security Agency and FBI requested in a Foreign Intelligence Surveillance Court order.
Armstrong believes that the developments diminish Yahoo’s value, the Post says citing “several sources.” There’s a danger that victims of the hack attack will sue, potentially leaving Verizon with unanticipated liabilities.
But Yahoo reportedly says that this does not provide sufficient grounds to break the agreement.
The two sides continue to discuss the matter ahead of a Yahoo board meeting in two weeks.
A $1 billion cut in Verizon’s deal would represent a significant reduction in the valuation for Yahoo’s assets. But more than 60% of its stock value comes from its investments in Alibaba and Yahoo Japan, which are not included in the sale.