4 ms·

Be careful about numbers. Yahoo consolidates baba and Japan earnings as 20+% owners. Baba may be deconsolidated going forward. Does your $1b number take the con

• adventured 12y ago
  Yahoo has historically been capable of generating 15% to 20% net income margins (before Alibaba contributed anything meaningful to their results). I see no reason why they wouldn't be able to continue that in the future. Yahoo has also become more efficient, having trimmed a lot of expenses from operations. Even if you were aggressive and pushed their net income down to $500 million on $4.5b in sales, you're talking about a 10 pe ratio. That also would not happen. Even when things were at their absolute worst in the last ten years - pre Alibaba - Yahoo still carried an $11 to $15 billion valuation. And that's the absolute worst context post dotcom bubble crash. The parent's position was that Yahoo's core is worth $5 billion. Well today AOL is worth $3.7 billion (with not much on their balance sheet of consequence). It's plainly obviously that under no scenario will Yahoo's business be valued at $5b when AOL is commanding a $3.7b valuation.