Yahoo is in a 'serious free fall'

yahoo marissa mayer

Buyers beware, Yahoo's financial prospects are even dimmer than people thought.

At least according to the disclosure documents that Yahoo is giving potential buyers. Re/code's Kara Swisher has seen "the book" and says it "shows a company in what has been a serious free fall."

Yahoo's revenue is expected to drop 15% and earnings to decline more than 20%, according to the report.

In February, Yahoo started looking for a buyer for its core businesses, including search, mail and news. The deadline for initial bids is Monday, April 11, according to Re/code.

Related: Marissa Mayer could get up to $37 million if Yahoo gets sold

The company expects to lose over a thousand employees this year, from 10,500 in 2015 to 9,000 at the end of 2016. But even with far fewer heads, Yahoo's (YHOO, Tech30) stock-based compensation will continue to hit $400 million.

"That's double what it was only a few years previously and means CEO Marissa Mayer is loading up valued employees with outsize share grants to get them to stay," Swisher wrote.

The documents also included an enthusiastic pitch for Yahoo's assisted-search technology Index, a potential competitor to Siri, Cortana, and Alexa-type assistants.

Related: Hedge fund goes nuclear on Yahoo

"Several possible buyers I spoke to ... think the entire book ... is confounding, because Yahoo has shifted around everything so much that it is not easily clear, if at all, what is making money and what is not," she wrote.

Swisher said investors find the company's numbers confusing, and the book does not make clear what departments are doing well. Even so, investors told Swisher they are planning to bid.

Swisher said there was more from the book to reveal. Yahoo did not immediately respond to request for comment.

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