No. I have been in the market for about 20 years. Usually, I don't write much on the boards. I have some time this week.
Sentiment: Strong Buy
Just plug in the numbers. I have used these numbers when I wrote the original message
Yahoo current market cap 40.75 Billion
BABA Share price 92.8
Yahoo owns 384 million shares of BABA
Value of Small Business unit 200 million
Cash from Yahoo to Spin co for operations
Total Yahoo shares 938.44 million
(40,750,000,000 - (92.8 X 384,000,000) - 200,000,000 - 200,000,000)/938,440,000 = $5.02/ share of Yahoo core after the split
Let me know if you still have any confusion
Couple more points
Yahoo makes a profit today. Once the share count is reduced to about 200-250 million range, the profit per share would be significantly higher in the range of $4/share for new Yahoo core. In my opinion if this is done correctly we are looking at Yahoo core to trade in the range of $50 by itself.
The calculation will be as follows
Yahoo share price after split:
YHOO market cap - BABA X 384 million - 200 million Yahoo small business - 200 million cash to the newly created company for operations. Divide all that by Outstanding shares.
As of now YHOO market cap is 40.75 Billion
BAB Share Price at 92.8.
If you plug in these numbers you will end up with Yahoo share price of 4.81/share on day1 of split. This includes Yahoo code, tumblr, Yahoo Japan, Cash, assets in all other countries and real esate.
So, I was saying if Yahoo uses cash at hand(about $5billion) after split they can buy back most of the stock. Yahoo also makes profit. So conserve cash now and buyback shares after the split
SPINCO value for Day1
BABA Share price X 384 million + 200 million small business + 200 million cash
Spinco share price is Spinco value by number of spin shares
# of spin shares can be anything
Hope this clears up any confusion
Sentiment: Strong Buy
After the split you will get SPIN and YHOO shares, Let's say the ration is 80 to 20.
SPIN will have minimal cash. YHOO will have most of the cash. With the share price lower for YHOO they can acquire lot more shares than at today's price. Hope this helps.
May be not 500 million but they would have cash to buyback more than 350 million shares. After split YHOO share price will be in the range of $9-$12
I would add more YHOO at that point. They will have cash to reduce the share count by 500 million.
Recorded webcast of presentation at
The 43rd Annual J.P. Morgan Global Technology, Media and Telecom Conference.
Originally presented May 19th, 2015, 08:40 AM EDT
Listen to it.
Spinoff is going well as per the plan
At 27 minute and 35 second marker your question is answered
Yahoo should be more proactive to market conditions to quell any rumors quickly. This should be done every time so people who are trying to scam will stay away from this stock. There is a separate IR department. They should scan for these kind of things every minute and should be able to respond quickly.
Yahoo has been working with IRS to create SpinCo for sometime, if there were any headwinds we would have known in the last Conference call. SpinCo will be trading this year and not year. When IRS changes any rules they typically change rules for the next tax year. They don't go making the changes without any prior notification. That's simply not the way Governments work. This particular news about IRS didn't just come out 20 minutes before the market closed. Someone has took good advantage of some sells and cleaned out all the stops and accumulated. Very good opportunity to get in my opinion for long term. If SEC digs deep they can find who accumulated most, that's another topic, though.
Sentiment: Strong Buy
Have you heard about a new battery which can charge in one minute. That news came out of nowhere until then. That battery didn't have the density required so can't be used. TESLA is doing research on battery Technology every day. It just so happens one day they find the right battery which satisfies all the conditions and may not need charging for a 1000 (thousand) miles. Until that day there is no risk to shorts. What if that day is tomorrow and the news is one tweet away from Musk. There is no telling how high this will go. I think it will skip more than 100 points straight up. There is no risk for shorts until then... enjoy