2 ms·

Why the assumption that BABA keeps declining in value? Shareholders probably have more faith in BABA than Yahoo core. Would make sense to sell core yahoo and ke

by Riod 11y ago

Why the assumption that BABA keeps declining in value? Shareholders probably have more faith in BABA than Yahoo core. Would make sense to sell core yahoo and keep Yahoo Japan and BABA under the Yahoo ticker. Reason being the tax from selling the latter two affects your PV more if you believe they will keep growing.

yeukhon 11y ago
It won't stay at its peak, very normal for most companies after IPO. BABA will continue to do okay in China as the ecommerce market is huge. The challenge BABA faces is quality rather than quantity and I don't think Alibaba is addressing it well. But I believe the real problem is Yahoo being a media/technology company, Yahoo must improve its core business in order to be sustainable in the long run. They can sell BABA now, walk away, and reorganize the entire company from scratch. I am not saying people are greedy, but when you really have the chance to start from scratch do it. But I don't think anyone has any idea where Yahoo should fit. Content? Search? Where does Yahoo stand? This is why the shareholders are not willing to sell anything because they themselves are clueless.
- Riod 11y ago
  Quality? In what way? Yea agreed. Yahoo is a bit of a head scratcher. They don't seem to be worldclass at anything in particular.
henrikschroder 11y ago
If BABA keeps declining in value, you'll reach a point where in hindsight it'll be obvious that Yahoo should have just sold the holdings, taken the tax hit, and distributed the money to shareholders. And that's a crap situation to be in, because you'll have armchair pundits calling out the company for not doing it. If BABA stays in value or goes up, then selling off the core is the best option, except it's hard, it has all sorts of complications, it takes a lot more time than someone just buying the entire company, which makes it harder to find buyers, and you might not get as good as price as you could if you sold the entire thing. Either way, you are making a huge bet on the future value of BABA, and you're damned if you do and damned if you don't.
- Riod 11y ago
  Yessir. Agreed

by Riod 11y ago

yeukhon 11y ago

It won't stay at its peak, very normal for most companies after IPO. BABA will continue to do okay in China as the ecommerce market is huge. The challenge BABA faces is quality rather than quantity and I don't think Alibaba is addressing it well. But I believe the real problem is Yahoo being a media/technology company, Yahoo must improve its core business in order to be sustainable in the long run. They can sell BABA now, walk away, and reorganize the entire company from scratch. I am not saying people are greedy, but when you really have the chance to start from scratch do it. But I don't think anyone has any idea where Yahoo should fit. Content? Search? Where does Yahoo stand? This is why the shareholders are not willing to sell anything because they themselves are clueless.

Riod 11y ago
Quality? In what way? Yea agreed. Yahoo is a bit of a head scratcher. They don't seem to be worldclass at anything in particular.

henrikschroder 11y ago

If BABA keeps declining in value, you'll reach a point where in hindsight it'll be obvious that Yahoo should have just sold the holdings, taken the tax hit, and distributed the money to shareholders. And that's a crap situation to be in, because you'll have armchair pundits calling out the company for not doing it. If BABA stays in value or goes up, then selling off the core is the best option, except it's hard, it has all sorts of complications, it takes a lot more time than someone just buying the entire company, which makes it harder to find buyers, and you might not get as good as price as you could if you sold the entire thing. Either way, you are making a huge bet on the future value of BABA, and you're damned if you do and damned if you don't.

Riod 11y ago
Yessir. Agreed