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Because if all shares of the company is valued at X, and the tangible assets of the company are valued at Y, and X < Y, then isn't Yahoo's stock objectively und
by rthomas6 12y ago
Because if all shares of the company is valued at X, and the tangible assets of the company are valued at Y, and X < Y, then isn't Yahoo's stock objectively undervalued? I'm not some sophisticated investor, I just buy index funds, but isn't this kind of objective valuation of companies the basis of value investing a-la Warren Buffet?
- foobarqux 12y agoNo, the discount is due to the fact that the market believes there is a risk that Mayer will misuse the money. More generally, no, you are not smarter than the market.
- rthomas6 12y agoNever said I was. That's why I buy the index funds. :)
- baddox 12y agoBut you can't buy 100 shares of Yahoo! stock then turn 24 of those shares into Alibaba stock. Just because Yahoo! owns a 24% stake in Alibaba doesn't mean your ownership of Yahoo! is fungible with ownership of Alibaba.