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While it is fun to do the subtraction and see that Yahoo's core business is negatively valued, liquidating the Alibaba and Yahoo Japan assets would come at the
by FlyingLawnmower 10y ago
While it is fun to do the subtraction and see that Yahoo's core business is negatively valued, liquidating the Alibaba and Yahoo Japan assets would come at the expense of significant taxes, which I believe accounts for why shareholders value the firm the way they do. Still shocking how drastically small the core asset valuation is in comparison to a deal Yang struck years ago, but it might make the valuation make more sense.
- vonmoltke 10y agoAlso, the simple subtraction ignores that the drag on Yahoo's value is debt. If Yahoo sold their stakes in Alibaba and Yahoo Japan the cash would presumably be used to pay off that debt. It is incorrect to tie all of the debt only to the core business.
- btian 10y agoNo idea what you mean by that. Yahoo has $6B in cash and short term investments, and $1.2B in debt.
- vonmoltke 10y agoThat is just the "current" debt. They also have almost $15B in long-term liabilities, primarily $13.5B in deferred tax payments and $1.2B in general long-term debt.
- btian 10y agoDeferred tax is only payable when shares in Alibaba are sold, which will not. Yahoo will spin it off tax free to shareholders.