For all that has been said by the bagholders and self-serving analysts out there, regarding the value of Yahoo!, there is one thing that ultimately declares the true value.
As we watch YHOO flirt with the daily low, remember, there are few hidden gems and this is not one of them. The value of any stock is what someone will pay for it. Future value is speculation and hype where strong fundamentals have not existed in the past. Yahoo! is a mismanaged company that has disappointed everyone time and again.
Valuations of $30 or more are the rantings of baboons.
Upwards of $20 is the stuff of hope and prayer.
Hanging on in the mid-teens is based on probability, meaning dead money for years to come.
The chance of it dropping lower is real, and has happened, primarily due to the abject ignorance of the CEO and the poor decisions of the BOD.
Tim Morse discussed last week that they are looking into a tax-free spin-off of their Yahoo! Japan stake. At recent market prices, Yahoo!'s 35% stake in Yahoo! Japan is worth $5.76 per share.
At the end of last quarter, Yahoo!'s cash and deferred revenue amounted to $2.96 per share.
Its 29% stake in Alibaba.com is currently worth $2.9 billion or $2.21 per share.
What is Yahoo's core business worth? If you take the mid-range of next year's earnings per share (of 91 cents) and apply a below market multiple of 7x, you come to a per share valuation for the wholly-owned business of $6.37.
You add all these numbers up and you get to a per share valuation of $17.30 and we haven't counted anything for the Asian private assets yet!
Assuming a current $50 billion valuation for Taobao alone (and assuming Alipay is worth half of that), Yahoo!'s 40% stake in the private Alibaba entities is worth $30 billion today (representing $22.90 per share). Even if you take a 40% haircut on that for taxes and illiquidity, that's $18 billion of value or $13.74 per share for these private stakes.
This brings a total sum-of-the-parts valuation of Yahoo! to $31.04 per share! $31.04/share.