How would this work for Yahoo? The pre-tax value of Yahoo!’s 40% preferred stake in Alibaba Group is around $14 billion based on related transactions over the past two months (and Yahoo!’s last earnings call). The pre-tax value of Yahoo!’s 35% stake in Yahoo! Japan is $6.5 billion at Yahoo! Japan’s current market price of Y25,000. Let’s discount this to $5.5 billion as Yahoo! Japan might need an incentive to participate and liquidity. Only 66% of the compensation involved in a “cash-rich split” can be in the form of cash. So for their $14 billion of Alibaba Group stock, Yahoo! would receive $9.2 billion in cash and $4.8 billion of “other” assets. The $5.5 billion for Yahoo! Japan shares would be roughly $3.6 billion in cash and $1.9 billion in “other” assets.
The article/blog is fun to comtemplate...but, with stock without the price going anywhere and without yahoo closing deals and selling its assets....the price of yhoo is a firm 15.50...no more...at least for today.
I hold, watch, and hope (on the otherhand...my nuan shares are keep my portfolio warm this winter). I would love it if yahoo would warm things up in the near future!!!!
I wonder how long it will take to sell 25% stake in Alibaba...it is complicated because of the fact that it must include a non-cash transfer....what do they want? What will they get? what will they do with it? Will they turn around and sell that equity? will they then be in a position to merge yahoo with something else? Anyone who thinks this is easy has no clue!!!!
So, hold tight, buy on the dips....and enjoy the ride...when (and IF) it finally happens!!!!
dude that has been out there for awhile...if in fact it really made any sense, the PE boys and girls would have been all over this company in the lo 20's-hey what a discount. good thing you are not a buy side PE guy, as you would not last very long by relying old analysis, and unrealistic expectations. the market does not lie!