- Last week, commenting on Yahoo’s massive data breach and the potential impact on its $4.8 billion acquisition by Verizon Communications, Verizon General Counsel Craig Silliman said “I think we have a reasonable basis to believe right now that the impact is material and we’re looking to Yahoo to demonstrate to us the full impact. If they believe that it’s not [material], then they’ll need to show us that … We still have a significant way to go in terms of the information we need to get before we can make our final determinations” and
- Verizon CEO Lowell McAdam said “we are still understanding what was going on and defining whether it was a material impact on the business or not.”
- Statements from Yahoo included “We are confident in Yahoo’s value and we continue to work toward integration with Verizon” and “Due to the pending transaction with Verizon, Yahoo will not have an earnings call or webcast for its third quarter results.”
- Regarding the controversial sales practices at Wells Fargo, the company said “Chairman and Chief Executive Officer John Stumpf has informed the Company’s Board of Directors that he is retiring from the Company and the Board, effective immediately” [and noted that Stumpf] “believes new leadership at this time is appropriate to guide Wells Fargo through its current challenges and take the Company forward.”
- Regarding Yahoo – The lack of disclosure by Yahoo management about the breach will require Verizon to reassess many assumptions in its due diligence process of the acquisition. Additionally, as some Yahoo mail users migrate to alternative platforms, the asset value of Yahoo is declining. Verizon management seems well positioned to seek concessions.
- Regarding Well Fargo – The firm’s controversial sales practices occurred under Stumpf's watch – and his testimony on the matter to the U.S Congress was not well received. The new CEO (a Wells Fargo insider) will need to address continuing litigation as well as increased regulatory scrutiny.