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SWS Group, Inc. Message Board

mlanders33 4 posts  |  Last Activity: Aug 22, 2016 9:44 PM Member since: Jul 27, 2007
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  • If the sale goes through will the remaining YHOO simply br a holding company for a large amount of BABA stock?

    Will there be any significant businesses left in YHOO other than it's BABA stake?

    Will YHOO and BABA trade very closely together then?

  • mlanders33 by mlanders33 Jul 27, 2016 7:17 AM Flag

    A number of funds are losing money on the equal weighted Short BABA Long YHOO.

    How does the sale of the Yahoo core affect this position?

  • Long time ago some funds put this trade on hoping for a tax free spin off of BABA. The spin never happened so of course the trade is in the red.

    A few funds have kept the position hoping YAHOO finds a timely way to tax efficiently return the value of their BABA holding to shareholders. The trade has ongoing hard costs and opportunitie cost.

    Example showing the problem: YAHOO cashing out their BABA shares (possibly in a private deal at a discount to the market price) and being taxed on the massive gain; then paying most of that money to shareholders who will pay tax on this money is something they would not do.

    What are the chances YAHOO finds a way to tax efficiency unlock their BABA value in a timely way?

    ...the market is saying not likely

  • The Short BABA long YAHOO trade

    Long time ago some funds put this trade on hoping for a tax free spin off of BABA. The spin never happened so of course the trade is in the red.

    A few funds have kept the position hoping YAHOO finds a timely way to tax efficiently return the value of their BABA holding to shareholders. The trade has ongoing hard costs and opportunitie cost.

    Example showing the problem: YAHOO cashing out their BABA shares (possibly in a private deal at a discount to the market price) and being taxed on the massive gain; then paying most of that money to shareholders who will pay tax on this money is something they would not do.

    What are the chances YAHOO finds a way to tax efficiency unlock their BABA value in a timely way?

    ...the market is saying not likely
    .

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