Link those facts with the DreamWorks deal, and SFTBY may get to a price this week where it should've been months ago.
I agree with the math and both articles. In Sue Decker's article on recode.net, she used the same basic numbers. $58 before tax (Barron's) / $47 after tax (Recode). Either way, YHOO appears to be undervalued no matter which article you use. Problem is, YHOO isn't selling their BABA shares & therefore not paying tax unless they do. The higher BABA goes, the higher YHOO should go.....unless some manipulation is occurring.
Read that article. Even if Yahoo sold ALL BABA shares at current price AND paid 35% tax rate, it would still put it at ~$47 per share
I think you are right. Not to mention Masayoshi Son being the Chairman of Yahoo Japan....he might have a foot in the door when negotiating (ha ha) Since he is almost sure he can't buy TMUS because of a merger being disallowed, he has that money set aside. Plus recently selling $4 billion in bonds (correct me if that's wrong)...I think Softbank (owner of 80% of Sprint) may be the one throwing out the offer
Article from Sept. 16th by former Yahoo President Sue Decker on recode.net.
Imma Be a BABA Bull: Yahoo, the Morning After
"For example, at $100 per BABA share, YHOO should trade around $47."
Summary board at end of article also includes 35% TAX RATE for her valuations.
She also projected BABA at $81 in her math.
Makes for an interesting read. Her words, not mine !! ((just bringing the info
to everyone's attention))
Maybe she is wrong, but I want to assume she knows more about the inner workings
of Yahoo than a lot of the guys on TV.
Only makes sense that if YHOO is $42 when BABA is $68, then it should be much higher when BABA is at $93
Shame that the BABA IPO is on options expiration day.....YHOO should jump at least by Monday
nope....none at all...nothing to see here....pay no attention to the man behind the curtain.
Repeating the interview on CNBC yesterday afternoon : Eric Jackson from Ironfire Capital. ((not being a pumper, just passing along someone else's opinion who probably isn't on this bulletin board))
A theory others have said that I am starting to agree with : options expire today, which would mean some sort of manipulation. The math says YHOO should be $50 if BABA is $90, but might not happen until Monday.
Exactly right.....the math makes perfect sense. Problem is, as others have stated, there is always the manipulation to keep it down as options expire today. Maybe over the weekend, someone will "magically" say : hey, Yahoo should be $50, not $42.50. If the $68 for BABA is baked into the $42.50 price, then $90 would and should raise YHOO....when??? that's the real question.
Based on math, BABA at $80 should bring Yahoo closer to $50...but whether that really happens or not remains to be seen. Back in May, it was estimated Yahoo's stake was worth $26 billion (if BABA is $50/share) , but now it looks more like $35 billion (if BABA is $66/share).
Wall Street Journal (Sept. 5) : Yahoo's Core business valued at $11 billion. That alone should add to Yahoo's share price, seeing as how analysts previously put Yahoo itself at ZERO.
Wall Street Journal blog (Sept. 5): Yahoo core business valued at $11 billion. Quite a bit more than the ZERO that was earlier reported. That alone should add to the share price.
Sentiment: Strong Buy
Quoting a Wall Street Journal article from May 6,2014: Headline --" Yahoo’s Alibaba Stake Is Valued at $26 Billion ". --------- This states that Alibaba felt, at that time, that BABA was worth about $50 per share. (The math worked out to $49.65 per share for BABA. Yahoo has 523.6 million shares.) This would be where Yahoo got their number of $26 Billion for their share. This article also came out long before Alibaba reported their new sales, earnings, and user numbers. Even if that is all priced into the current price of YHOO stock, then wouldn't it appear that as long as BABA comes out higher than $50/ share, then owning YHOO is a no brainer??
I am not sure if YHOO would double, but that's not impossible. Personally, I can see BABA in the $72/$75 range, which would still raise YHOO's worth considerably. Besides, YHOO sells the shares promised and throws a special dividend to share holders, I can't see YHOO going down very far as a worst case scenario
even if BABA does start under $50.
Sentiment: Strong Buy