article

Yahoo! valuation ?

[WHAT]

  1. ] By Matt Levine @Bloomberg view - analyzing the current valuation of yahoo considering its holdings in Alibaba and yahoo japan

[WHY]

  1. ] 

[WHERE]

  1. ] READ THE FULL ARTICLE
    1. ] http://www.bloombergview.com/articles/2014-04-17/how-can-yahoo-be-worth-less-than-zero

[WHEN]

  1. ] 2014-04-17

[EXAMPLE auto summary]

  1. ] Whatever you think Yahoo is, a 35 percent stake in a separate but similar publicly traded company called Yahoo Japan, and a 24 percent stake in a separate, different, soon-to-be-publicly traded company called Alibaba.
  2. ] My Bloomberg View colleague Matt Klein ran the numbers in March, and non-Bloomberg-affiliated Matt Matt Yglesias ran them again today, and the numbers tell you that 2+3 > 1+2+3, as it were: Yahoo's Alibaba and Yahoo Japan stakes add up to be worth more than Yahoo is worth.
  3. ] So Core Yahoo could in fact have a negative value to Yahoo's shareholders, by reducing the amount of Alibaba that they effectively get.
  4. ] A fun question is, as fiduciaries for shareholders, should Yahoo's directors split into three separate companies to maximize value? If YJHI and YAHI are worth around $9 billion and $40 billion, and Core Yahoo Inc.
  5. ] That's as true of Alibaba and Yahoo Japan as it is of Core Yahoo: Each of those businesses would, as a matter of arithmetic, be worth more on its own than it is in Yahoo.
  6. ] Each share of those businesses that Yahoo owns is worth less to Yahoo shareholders than a share that those shareholders own directly.
  7. ] Incidentally, Dan Loeb's 2011 activist campaign at Yahoo included arguments for unlocking the value of Alibaba and Yahoo Japan, but at the time he estimated that Alibaba was worth $25 billion and that Core Yahoo had some positive value, so he didn't give it the focus it might get now.
  1. ] yahoo is ..
    1. ] whatever you think Yahoo is, example "Tumblr and Flickr and the iOS weather app that I love and all the news sites and the mail and the fantasy sports stuff" -- 
      1. +] yahoo finance +] yql
    2. ] a 35 percent stake in a separate but similar publicly traded company called Yahoo Japan, and
    3. ] a 24 percent stake in a separate, different, soon-to-be-publicly traded company called Alibaba.
  2. ] the numbers tell you that 2+3 > 1+2+3,
    1. ] 1=  is worth a negative amount of money, something like negative $13 billion today

[HOW-TO]

  1. ]

[REFERENCE]

  1. ] marissa mayer
    1. ] links to articles on marissa, yahoo
  2. ] TAG related
    1. ] business/analysis/ ? valuation ? company

 

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ID: 2811

NAME: how-can-yahoo-be-worth-less-than-zero

DESCRIPTION: By Matt Levine @Bloomberg view - analyzing the current valuation of yahoo considering its holdings in Alibaba and yahoo japan

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EDITOR: article.editor/s

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STATUS: Write

PRIORITY: 0

OWNER ID: 75

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