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Conglomerates are often worth less than the sum of their parts because profits from successful businesses can be easily transferred to other businesses that are
by foobarqux 12y ago
Conglomerates are often worth less than the sum of their parts because profits from successful businesses can be easily transferred to other businesses that are poor investments.
In the case of Yahoo, the market believes that it will destroy a substantial portion of the value of their share of the Alibaba business by making bad investments into core Yahoo.
- hyperpape 12y agoThere's an interesting effect there: if Yahoo doesn't have Alibaba, its core business probably couldn't be valued at a negative level (near zero might be possible, but not negative). I guess that makes sense at some level.