NEW YORK (TheStreet) -- Twitter (TWTR) surged in after-hours trading after announcing embattled CEO Dick Costolo will be resigning on July 1. Yahoo! (YHOO) tanked after analysts questioned its ability to do a tax-free spinoff of its Alibaba (BABA) stake. Alibaba tumbled following a price target cut.
Twitter spiked 7.4% in after-hours trading to $38.42. But during the regular session it fell 0.03% to close at $35.84 during the regular trading session.
The stock soared in after-hours trading when Twitter said Costolo would step down on July 1, with co-founder and Chairman Jack Dorsey filling in temporarily while the social media giant searched for a new CEO, according to a report in the Wall Street Journal.
Costolo's resignation comes at a time when Twitter's advertising strategy has come under question following its first quarter revenue miss, the Journal noted. Additionally, Twitter's user growth has only risen 18% in the past year and is a fraction of Facebook's (FB) size.
Yahoo! tanked 2.7% to finish the session at $40.93, on a day when the broader markets advanced.
The Internet pioneer plunged after Capstone analysts said it's unlikely that the U.S. Treasury Department and Internal Revenue Service would approve a tax-free spin off of Yahoo's Alibaba stake. If that happens, that could translate into a tax expense that would equal more than $11 per Yahoo share.
Currently, Capstone believes the tax-free spinoff is already accounted for in Yahoo's share price so if it's not allowed it could have a significant impact.
Additionally, UBS lowered its price target for Yahoo to $58 a share from $59 per share, according to a report in Briefing.com.
Alibaba fell 1.9% to close at $87.21.
The Chinese e-commerce giant tanked after HSBC analysts cut its price target to $124 a share from $136 per share.
In making the price cut, analysts cited its investments in mobile Internet services, cloud services and digital content as likely leading to pressure on its margins.
Other research firms that lowered their price targets on Alibaba included RBC Capital Markets, which dropped it to $105 from $110, according to a report in Briefing.com.