The center of that story for weeks. Bob peck, the analyst with sun trust. Bob, its good to have you back. Thanks for having me. The board is considering a spin or a sale of the core assets or maybe other things. Whats most likely to happen . A couple of these. We think when yahoo did not receive its public ruling from the irs that that would be taxfree, but that was a material adverse change. The board right now is doing what it should do prudently looking at all the other options that maybe more taxrisk averse. With that you have a spin of the core and absolute sale of the core. You have a sale of the asset. You could even do a cash rich tax free spin with alibaba. Theres a bunch of alternative theres, and we think theyll ultimately look to maximize their sharing responsibility. Taking it a step further. Tell me what you think is likely. Probably most likely, most simple and we point in our note today, you could just flat out sell the core, which we think could generate 6 billion to 8 billion on that asset. Maybe more depending on the pp e that they have. With the cost basis against that, your taxes may only about 1 billion or 2 billion rsh. Much lower if you had to pay taxes on the alibaba spin, which could be north of 20 billion. Ease where i for us to say. Right, bob . If they sell it to whom . We think a lot of media properties, comcast, as you know, verizon bought aol. You could even argue in the news core, cvs, at t, direct tv. Even some of the international players. People have looked at soft bank, alibaba, et cetera. If the board is considering all of these options around the core of what yahoo is, what does that say about the boards belief or lack thereof in the ceo, march isissa meyer . Since shes been there, revenues are down. Core revenues are down. Ebida down north of 60 . When you look at the visitors, the usage hasnt turned around. We go through this in detail in the notes. I think if they are playing on a reset in 2016, you could see it at the ceo level as well. If they spin or sell the core business, what do they have left with her . I think that point has been raised by jim cramer and others this morning. Its a really fair point. Whoever did buy the asset, should they sell it. It would probably decide whether they run it, whether they have their own executive internally or externally if they would bring in. The only thing left at that point would be some cash, a stake this that yahoo japan, and the alibaba shares. Where does ross livinson fit in all of this . Weve got him tomorrow exclusively on this program. You know were going to ask him about it. Where do you think he fits . We did a list of top candidates should ms. Meyer move on. Loss livin sohn floated to the top and they have public equity ceo experience. They also have very intimate knowledge of yahoo. Having been there before. Much like swrak dorsey ended up being the candidate or the successor ultimately over at twitter unique knowledge of twitter, those two stand above the rest of the crowd for yahoo. You expect to hear something fairly quickly from here on out, bob . What a lot of people are missing is dont forget by december 9th were supposed to get an alert from bond holders if we continue with the spin. Thats only a week away or so. Re code admits on having board meetings this week. You could hear something as early as this week, but we have to see something by december 9th. They need to know if the spin will proceed. Bob, once they make the announcement theyre going to sell the core business, how strong do you think the actual interest will be, and will it be a multimonth process where a very healthy premium value could ultimately behave on yahoo . Yeah. Well, right now as far as the premium value, there is no value being ascribed to the core. In our notes today we talk about 68 billion. The reason why its an instant way to get a billion union weeks and you get the add techs and you get the over the top stuff that you need. Theres some ip there as well. If you go through our math today, youll see that at the end of the day its almost zero tacks going to yahoo. Hey, bob. You know the space as well as anybody. Who is the best bid . Who is the best buyer out there right now for that . I know you have your list up there of who could possibly be, but who do they fit with best . In other words, who would you say, by the way, that really was exactly what they needed to do. You saw verizon make the move on aol. You just follow that playbook. You point more towards at t or comcast. I think those types of players will probably make most sense. I appreciate your time today. Interesting story. You sold half based on the pop today. Yes, they did. Based on the pop today and the belief that if the board doesnt get something done, this thing goes right back down. I mean, i think the pressure is on the board now to make something happen over here. Clearly just as bob peck has said, somebody who knows the space as pete said, far better than i do, but marissa has not made it happen over there at wrau hue. Not at all. Hasnt even moved the needle. Instead its been going down. I think if the board cant make something happen here, theres no reason to stick with it. You are taking your money and running today at 7 . 6 billion to 8 billion in proceeds seems like an awful generous number that bob peck is assigning to this whole asset. That would mean that you are talking about a premium to the veriz verizonaol multiple. Wron if you want to say that yahoos assets are better than aol. Maybe theyre about the same. Maybe some advantages and disadvantages. Thats a big number. I think you could maybe talk about a 4 billion in proceeds. Maybe. Then some of the parts about 35, 40. Maybe some of the stock rallies, but i think you want to be taking some. Thats exactly where my question to him was on the value. You have to assume that 5 billion, 6 billion that theres multiple suitors for this company. You have to assume that people are getting into a bidding war. Have you to assume that maybe marissa makes the phone call to google and see if google allows it to happen. They cannot fix this asset. They have tried many times. I havent heard anybody say anything good about anything yu hue has or anything that its done or what marissa myer has done . Thats because what weve said about what marissa has been able to accomplish, which i think most of the desk has said, doesnt seem like a whole lot, scott. With an analyst that was down there and pounding the table saying, hey, we think it should go to here. Im sobt sure. I like what john is talking about. Take off half, and then you have something to go. Yahoo, by the way, three years. Up 91 . Five years up 120 . Yeartodate, though, its down nearly 29 . It is getting that lift today by 7 . A story we will continue to follow not only on this program, but throughout this day. By the way, just to remind you once again, tomorrow we will talk exclusively with former wrau hue interim ceo ross levinsohn, back on some some lists, including bob pecks, as a possible replacement for Marissa Meyer if, in fact, she does not hold that position for the long haul. We shall see. Want to also update a story we first told you about yesterday. Ae filing coming a day after it was revealed that mr. Tepper sent the letter questioning the relationship with sun edison. Tepper critical of a transaction between those two companies suggesting that sun edison is trying to push risky assets into terraform. Which would change its Business Model and hurt shareholders . In particular mr. Tepper is taking issue where sun edisons deal made in july for 2. 2 billion. In kekdz with that deal, sun edison plans to put some of the assets into terraform making the company a player in the resident wral roof top solar market. Thats a departure from its original business. Mr. Tepper also taking issue with sun edison, appointing some of its own directors to teraforms board. We told you yesterday that two Board Members resigned as a result of that move saying they no longer could protect the interest of shareholders in good faith. We dont know what mr. Tepper plans to do here, but it is interesting to note that in the filing today thats where it gets even more interesting because i went back to the july press release, detailing the perfection between sun edison and terraform, and it appears that kirkland and ellis acted as m a council for both companies, and that scadan acted as financial counsel. Some wonder whether that constitutes a conflict of interest. We should note that lassard and cleary acted as guidance to the conflict committee of terraform and sun edison also hz counsel. Some are asking, however, today whether there was a wlikt of interest here. I have reached out to both Kirkland Ellis and scadland. Mr. Tepper refused comment. As you probably know by no now, sun edison shares have been clobbered this year. Terraforms have been as well. Theres a look at the stocks today. Says interesting to note of who was advising on both sides, and the questions that some are raising as a result of that. Who wants to comment . Sfroo well, we know now where david tepper was so animated when he was on when he was asked the question by kelly because the day before i did a lot of trades in sun edison, and i did them based on unusual activity. Rumors were that mr. Tepper was involved. He said someone is smoking someone if they think im involved. He was adamant and vitrealic in his twens that i would never consider buying that company and that sort of thing. Its the socalled sponsor as sun is the parent company. Loo when kelly asks him, and im sure he saw it on twitter as well and orred heard it from steve weiss who was probably in his ear asking him about it, this is a sticky situation because whoever was executing trades for him because yovrl he wasnt in in july when it was 40 a share, but he may have been in somewhere between 20 where it was three months ago, judge, and where it got down to 6 and we all know nobody really gets to buy the bottom it was what we thought maybe the most interesting part of this story yesterday. Beyond the tepper letter itself and that was in the filing of these two Board Members quitting the board saying that they could no longer in good faith protect the interests of the stockholder. Thats part of the story that well continue to follow, and then theres the issue as well of the conflict of interest with some have raised me in which i have reached out to both Kirkland Ellis and scadand, well let you know what we hear if and when we do. He correctly predicted the crude collapse, and now is he back with his 2016 outlook. Citis global head of moderateties ed morris joins us next. Mrx plus, we continue to wait for a major speech today in that room right there in the Economic Club of the washington d. C. By the fed chair janet yellen. She comes with the adp report. Better than expected. Some of the Economic Data of late has not been great. The jobs report is this week. The fed meeting is next. Were going to take you live to d. C. When ms. Yellen takes the podi podium. Youre watching cnbc, first in business worldwide. Hi watson. Annabelle, your birthday is tomorrow. Im turning seven. What did you ask for . A princess. And a pony. You like things that begin with p. I like pink frosting too. Will you have a cake . Yeah. I was too sick to have one last year. The data your doctor shared shows you are healthy. Are you a doctor . No. I help doctors identify cancer treatments. I want to be a doctor someday. I can help with that too. Watson, i like you. Were back, and just two days away from opec and the meeting that it will be closely watched by the oil market. Our next guest says the once mighty cartel could be losing its power. Ed morris is the global head of commodities at citi. He swroinz us live today from new york city. Welcome back. Nice to see you. Good to be with you. You want to size up what you think happens this week with opec . Its easy. Nothing is likely to happen. Calling for a 5 cross the board cut. The majority of the countries want to cut, but the problem is the big guys. Saudi arabia has decided not to cut. Either not for now, or not for a very long time because theyre more interested in preserving market share than lose it to other opec countries. Okay. So basically youre telling me that oil stays under pressure then . Well, oil should stay under pressure for a while. Zoorchlg the. The market is nervous about that 40 level and maybe breaking below it. Should we be worried about that level of 40 . I sort of never worry about any given level. Certainly its a number that sticks to peoples minds because if it goes to 39, why not go to 32 . The market is really over supplied. The eia data today showed another stock build. You add up all the inventory. U. S. Crude and products and Strategic Petroleum reserves its over 2 billion barrels of oil. That weighs heavily on the market, even if there was an opec cutback. The world is over supplied, and its about to get more. We think there is light at the end of the tunnel. Light at the end of the were. Well see inventory draws by the end of 2016. Maybe a good bit of pain in the First Quarter. You are looking for a 55 wti in 2016. We think thats a certain bet for when that starts happening, the buldz in the market will start appearing . Appreciate your time. Well see you soon. Always good to be with you. Likewise. Ed morris of citi. 38. 24r. Thats the august low. Slides below there, it obviously will go to 35 very quickly. Is it static over the course of the year . Is it something that he just mentioned is a Fourth Quarter event and why is it that we get there. What about energy equities. You have calls this week, people trying to make the bottom calls, you know. Theres one gentleman i think upgraded to what was it, like, 23 service stocks. You are getting some degree of divergence. Some degree of divergence in the quality names away from the price of oil, which is good, but you are certainly not getting a broad based divergence in the Energy Equity names. I talked about those yesterday. Yes, you are seeing a little bit of appreciation there. I think those still under pressure, its going to intense tie. The pressure could continue certainly in the next couple of quarters. I think at the same time youll have u. S. Production, shale production could continue to cut. Rig count will continue to go down. Its going to take time to get that supply demand balanced. If you think that oil is going to be higher by the end of 2016, you birth believe that these stocks are going to start to discount that six, eight months ahead of time. In the beginning of First Quarter is when you really are going to probably want to load up and take advantage of some of these declines, but to joes point, permean for sure, emp, maybe large integrateds, you dont want to go all in, i dont think. We still await that major speech today from the fed chair janet yellen. We are moments away from that from the Economic Club of washington d. C. Well take you there live. The market certainly waiting for those comments today. We are watching the markets with a bit of a mixed picture now. The dow is down 46. S p is down eight, and the nasdaq is actually bucking that trend. It is up six. Were back right after this. You pay your Car Insurance premium like clockwork. Month after month. Year after year. Then one night, you hydroplane into a ditch. Yeah. Surprise. Your Insurance Company tells you to pay up again. Why pay for insurance if you have to pay even more for using it . If you have Liberty Mutual deductible fund™, you could pay no deductible at all. Sign up to immediately lower your deductible by 100. And keep lowering it 100 annually, until its gone. Then continue to earn that 100 every year. Theres no limit to how much you can earn and this savings applies to every vehicle on your policy. Call to learn more. Switch to Liberty Mutual and you could save up to 509. Call Liberty Mutual for a free quote today at see Car Insurance in a whole new light. Liberty mutual insurance. Moments away, Steve Liesman with what we might expect today. Hanks, steve. Thanks very much. Janet wrelen, the fed chair speaking in washington will say that the economy has come a long way towards the feds jobs and inflation goals. That the Economic Data since october is consistent with the feds expectations of an improved job market. On hiking rates, i want to read you something that she said verbatim. Doing so will be a testament to how far our economy has come. In that sense, it is a day that i expect we all are looking forward to. She anticipates continued moderate growth in the economy and sees sufficient growth to boost the job market and raise inflation over time. She cautions that data between now and the meeting, including the jobs report, inflation, and retail numbers, could sway that decision. She does point out theres been less progress on inflation, but drags on inflation, including oil and weak overseas economies, she expects, to diminish next year. She says it will be appropriate to be more cautious raising rates from the zero lower in part because they had more ammunition to fight ammunition than they do deflation. She has a long part where she says the fed must take account of the lagged affects of policy. In other words, that it takes a while for the affects of fed policy to affect the economy. Those dangers include that the fed might have to tighten abruptly, they could inadvertently create a recession by doing so, and they could encourage excessive risk taking for longer. Finally, she has a section on after the fed hikes. Even after she says the fed funds rate will be accommodative and that she expects the path of the funds rate will be key. Not the date of the first hike. Thats the thing that influences both the economy and the public. Finally, repeating statements that have been made in the fed policy statement. She says the feds rate will remain low even after it hits its inflation and employment targets. Theres a big long section about the neutral funds rate that she says will rise only gradually. Scott, i think she could have been more direct, but i think the hinges to think about is there is a jobs report on friday. There is Additional Data between now and then. Finally, yellen has shown herself to be a chair thats very respectful of the committee and does not want to frontrun the committee and have them go into a meeting where the chair has said definitively that rates will go up. However, shes doing nothing today to diswade investors that december is not going to happen. Its an