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That depends on how the deal is structured and what happens to the other pieces. This is where mergers and acquisitions get complicated. Part of Verizon's pri
by vonmoltke 10y ago
That depends on how the deal is structured and what happens to the other pieces. This is where mergers and acquisitions get complicated. Part of Verizon's price tag might be assumed liabilities from Yahoo. Maybe part of the Alibaba stake gets sold to cover them. Maybe it stays with whatever the holding company remnant will be. Can't tell from just a public balance sheet and a headline. However, assuming Verzion is going to take on all $16B of Yahoo's liabilities when they are getting a relatively small portion of the assets is ludicrous.
- mikeash 10y agoMakes sense. Do I understand correctly, then, that Verizon is taking on an unknown amount of Yahoo's debt as part of this deal, with the exact quantity to be determined by what the two parties negotiate, and until that's known it's pointless to talk about the net value of the piece that Verizon is buying?
- vonmoltke 10y agoGood question. As I pointed out above, after looking at the balance sheet history, it appears that the bulk of Yahoo's liabilities are tied to the Alibaba investment. Those liabilities will understandably follow that asset, and shows just how ridiculous the math is that people here are using here. Alibaba is not worth what is on the asset side. It is worth that value minus the liabilities specifically tied to that asset.