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If you strip out the Alibaba and Yahoo Japan stakes, the market is valuing Yahoo's "core" at less than $8bn. It has $5.88bn of cash, cash equivalents and short-

If you strip out the Alibaba and Yahoo Japan stakes, the market is valuing Yahoo's "core" at less than $8bn. It has $5.88bn of cash, cash equivalents and short-term marketable securities on its balance sheet, which means that the core business is valued at less $1.5bn. https://docs.google.com/spreadsheets/d/1UHMfzlmE7HXY_ph9BN686gOCiji1bQ-rsbnjtKD3oho/edit?usp=sharing https://docs.google.com/spreadsheets/d/1UHMfzlmE7HXY_ph9BN68... The balance sheet figure for "Property and equipment" is higher than that. http://files.shareholder.com/downloads/YHOO/900583056x0x163717/e3b6723a-7d29-4a37-8dff-5bcf3a67d1d3/YHOO_III_BalanceSheetGAAP.pdf http://files.shareholder.com/downloads/YHOO/900583056x0x1637...

adventured 11y ago
In fact it doesn't mean that. Its the assets on Yahoo's balance sheet that are being discounted by investors. Yahoo's business receives a multiple rather than a discount - whether that's a multiple on sales or earnings. Cash and assets held on a corporate balance sheet are basically never $1 to $1 accounted for in a market cap. You can easily see that in action on the balance sheets of: Berkshire Hathaway, Apple, Comcast, Time Warner Cable. Are we to pretend that Berkshire Hathaway's business is worth ~$140 billion after we strip out all of its assets (cash, stock holdings etc)? So its earnings are getting a 7 or 8 multiple? Obviously that's not actually how valuations work. If you stripped out all of their assets, they'd very likely still get a fair market valuation on the operating business and its potential, perhaps 13-15 times earnings. A similar bogus claim was made that Yahoo was worth less than zero, when its Alibaba stake was at its peak. That's not actually how things work in reality, that scenario solely exists in a calculation. In reality, if you spin off all of Yahoo's assets (specifically Japan / Alibaba), the business would still be given a multiple, a meaningful valuation. Even lowly AOL was still worth $4.4 billion in the Verizon acquisition, and Yahoo's business is two to three times more valuable than that. There isn't a single example in the public market, in which a corporation with a relatively clean balance sheet, and $4 billion in sales, is given a negative ~$X billion valuation - much less a company that has historically been given high valuations as a semi-tech company. Which proves how absurdly wrong the negative value premise is (or the $1 to $1 asset discounting method applied to the assets, which are clearly not worth $1 to $1 in the market cap given taxation issues alone).
- jackgavigan 11y ago
  > In reality, if you spin off all of Yahoo's assets (specifically Japan / Alibaba), the business would still be given a multiple, a meaningful valuation. I'm sure it would but right now, the sum of the parts is greater than the market value of the whole. That says something about investors' expectations for the future prospects of the company.

adventured 11y ago

In fact it doesn't mean that. Its the assets on Yahoo's balance sheet that are being discounted by investors. Yahoo's business receives a multiple rather than a discount - whether that's a multiple on sales or earnings. Cash and assets held on a corporate balance sheet are basically never $1 to $1 accounted for in a market cap. You can easily see that in action on the balance sheets of: Berkshire Hathaway, Apple, Comcast, Time Warner Cable. Are we to pretend that Berkshire Hathaway's business is worth ~$140 billion after we strip out all of its assets (cash, stock holdings etc)? So its earnings are getting a 7 or 8 multiple? Obviously that's not actually how valuations work. If you stripped out all of their assets, they'd very likely still get a fair market valuation on the operating business and its potential, perhaps 13-15 times earnings. A similar bogus claim was made that Yahoo was worth less than zero, when its Alibaba stake was at its peak. That's not actually how things work in reality, that scenario solely exists in a calculation. In reality, if you spin off all of Yahoo's assets (specifically Japan / Alibaba), the business would still be given a multiple, a meaningful valuation. Even lowly AOL was still worth $4.4 billion in the Verizon acquisition, and Yahoo's business is two to three times more valuable than that. There isn't a single example in the public market, in which a corporation with a relatively clean balance sheet, and $4 billion in sales, is given a negative ~$X billion valuation - much less a company that has historically been given high valuations as a semi-tech company. Which proves how absurdly wrong the negative value premise is (or the $1 to $1 asset discounting method applied to the assets, which are clearly not worth $1 to $1 in the market cap given taxation issues alone).

jackgavigan 11y ago
> In reality, if you spin off all of Yahoo's assets (specifically Japan / Alibaba), the business would still be given a multiple, a meaningful valuation. I'm sure it would but right now, the sum of the parts is greater than the market value of the whole. That says something about investors' expectations for the future prospects of the company.