When Yahoo hired ex-PayPal president Scott Thompson, everyone in the industry said "who?"

Maybe that's a good thing.

Maybe Thompson wants to make a name for himself at Yahoo.

He's on his way, with a big move today.

Today we learned that Thompson has scuttled Yahoo's plans to trade its stakes in Yahoo Japan and Alibaba back to Yahoo Japan and Alibaba through a financial transaction called a "cash-rich split."

This is a wonderful move.

Here is why.

To get the deal done without Yahoo paying a huge 40 percent tax bill, Alibaba was going to have to spend $5 billion or so acquiring a bunch of companies and then trade those companies to Yahoo for Yahoo's stake in Alibaba.

Another stipulation to avoid that tax bill is that the whole thing would have to be completed in a year.

Mergers are usually a bad idea.

Big, big billion dollar plus mergers are worse.

Multiple mergers all at the same time are even worse. 

Multiple mergers that all need to close within a year are just not a good idea to attempt.

Yahoo shareholders are angry at Thompson right now, and they're taking it out on the company's stock price.

Good for Thompson for ignoring them.  It is to their benefit.

(The big winners in the cash-rich split were never going to be Yahoo shareholders, anyway. It was going to be the PE firms orchestrating the deal. They were going to lend Alibaba the money, and then, if the rumors were true, convince Alibaba and Yahoo to use that money to buy companies from their own portfolios! )

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