In the third quarter, Yahoo purchased eight companies, including Lexity, Rockmelt, and Xobni. According to its earnings release, the net cash impact on those purchases totalled $163 million.
Does that mean that the total value of the eight purchases came to $163 million? Not at all. That figure is merely the net cash outflow for Yahoo, or, the total cash that it paid to the companies’ shareholders, less cash that the companies had on hand.
This doesn’t give us the full picture of the total cost of Yahoo purchases, given that the company could also employ stock as well as cash to make acquisitions. In fact, that seems to be the majority option. Here’s Yahoo in its second quarter earnings:
During the second quarter of 2013, Yahoo! repurchased 25 million shares for $653 million and used a net $1 billion in cash for acquisitions (including a net $970 million to acquire Tumblr).
That appears to imply that Yahoo used a net $30 million that quarter to acquire the eight companies that it picked up in the second quarter that were not Tumblr (for a total of nine second quarter acquisitions).
Unless Yahoo bought exceptionally cash-rich companies – not likely, frankly – then it appears to have used far more of its own stock as bargaining chip than cash to purchase the smaller firms. The Tumblr deal was nearly all cash, though the company had over $15 million in cash on hand at the time of the deal.
Speaking very purely, Yahoo has under $1 billion in cash and equivalents. But, its total cash position, as it is usually calculated including “[c]ash, cash equivalents, and investments in marketable securities” total $3.2 billion.
That, tied to its forthcoming massive Alibaba check, and Yahoo is more than sufficiently capitalized to keep on buying if it wants to. Though, it isn’t clear if Yahoo will pursue more cash-focused, or stock-based purchases moving forward. It has shown an appetite for both.
Top Image Credit:Â Kevin Krejci