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> Sure, it is - it's worth a few billion. Yahoo market cap: $27.5bn Alibaba post-tax: $17.5bn Y! Japan post-tax: $6bn Net cash: $5bn Market value of core Y

> Sure, it is - it's worth a few billion. Yahoo market cap: $27.5bn Alibaba post-tax: $17.5bn Y! Japan post-tax: $6bn Net cash: $5bn Market value of core Yahoo: -$1bn. Ouch! If Yahoo didn't have those assets, the market cap would fairly reflect the value of a slowly declining multi-billion-dollar business, and it would be perfectly positioned for a takeover by private equity, who would proceed to milk the company dry, delivering tremendous shareholder value for everyone... But since the uncertainty around the stakes are so high, you get the above weird valuation of the core, which makes selling off the core very difficult. The market doesn't "know" what a fair price for it is.

TheOtherHobbes 11y ago
I don't think that's the true core value - more a statement about the way that Yahoo's current business model (if you can call it that) has a big net negative value. Currently Y! is literally less than the sum of its parts. There are a lot of reasons for that, but the absence of a "Where is this company going to be five years from now?" plan has to be a big element. Investors barely have confidence in the present, never mind the future - mostly because Mayer has completely failed to reassure them.
- dragonwriter 11y ago
  > Currently Y! is literally less than the sum of its parts. Or, at least, its market cap is worth less than the market cap of things it owns times the share it owns of them, meaning that (assuming the consistent utility of market-cap-based-valuation) that it is either worth less than the sum of its parts, or that some of its other parts have negative net value. The latter offends lots of people's intuitions about what those parts should be worth, but those people don't seem to be putting their money where there mouth is and buying up the undervalued Yahoo! stock, so maybe either simplistic market cap to market cap based value analysis is wrong, or those other parts really do have negative value, or both.

TheOtherHobbes 11y ago

I don't think that's the true core value - more a statement about the way that Yahoo's current business model (if you can call it that) has a big net negative value. Currently Y! is literally less than the sum of its parts. There are a lot of reasons for that, but the absence of a "Where is this company going to be five years from now?" plan has to be a big element. Investors barely have confidence in the present, never mind the future - mostly because Mayer has completely failed to reassure them.

dragonwriter 11y ago
> Currently Y! is literally less than the sum of its parts. Or, at least, its market cap is worth less than the market cap of things it owns times the share it owns of them, meaning that (assuming the consistent utility of market-cap-based-valuation) that it is either worth less than the sum of its parts, or that some of its other parts have negative net value. The latter offends lots of people's intuitions about what those parts should be worth, but those people don't seem to be putting their money where there mouth is and buying up the undervalued Yahoo! stock, so maybe either simplistic market cap to market cap based value analysis is wrong, or those other parts really do have negative value, or both.