I don't believe the market is doing that. I think it's treating BABA and Y-Japan as fully taxable and then valuing the core at about 7-8 billion plus the net cash on hand. Do the math ad you come up with about what YHOO is oing for right now.
I was surprised to see you say that the market is valuing the core at zero or less than zero. Isn't the market in fact probably valuing it at about 7-8 billion plus the net cash on hand -- because the market is treating all of the Asian holdings as fully taxable right now? And will continue to do so until Alibaba buys back its shares, God willing?
Wrong. If BABA went to 50, YHOO would trade at about 33, even assuming that the market still deducts a full tax hit from the BABA and Y-Japan shares. Good fiction writing though on your part.
Actually, it would probably go to 37.50, but as long as you're just making numbers up, who cares, huh? Also, if BABA goes up to 200, YHOO will go to somewhere between 75 and 100 -- and that's assuming that Yahoo doesn't even get the Apple deal, which is probably a bad assumption.
September has always been the earliest possible sales date. Nothing about yesterday's earnings call changed that. BABA is no closer to having a glut of its shares on the market than it ever has been. Also, there is little likelihood that 383 million shares of BABA would ever be dumped on the market at one time anyway.
For those of us who don't understand anything about options, can you explain what you mean and where you think the pps is going today?
I think that, even though Yahoo is confident that its tax plan will work, they specifically said yesterday they are waiting a ruling from the IRS. So even though lots of people are pretty convinced it's all going to work, I think the market is still not going to factor in the tax savings (or at least all of the tax savings) until the IRS rules and removes all doubt. It's a shame because I think that's fairly irrational, but I think, once again, we all have to be patient. In the end, Spinco will be worth somewhere between $41-51 per share (assuming BABA is somewhere between 100-125) and the core should be worth somewhere north of $20. It might take till the fourth quarter, however, for that to happen.