I thought Yahoo's stock price would rise on this news (because it removes the uncertainty that was overshadowing the original Aabaco spin-off plan) but, despite a brief opening spike, the stock is down on yesterday's close.
On the conference call this morning, the management team sounded really downbeat. I expected them to sound positive and optimistic, talking about unlocking shareholder value and focusing on Yahoo Core but they sounded like somebody had died.
As of this moment, the market value of Yahoo's stakes in Alibaba and Yahoo Japan are $32.5bn and $8.67bn respectively, while Yahoo itself has a market cap of $32.37bn.
To quote Matt Levine, "the whole point of Yahoo as a company right now is to not pay taxes on Alibaba. [...] If there was a way to avoid paying taxes on the Alibaba shares that involved burning all of Yahoo's actual businesses to the ground, Yahoo should do that all day long, and then do it again the next day. It would still add shareholder value."
"And the market, right now, is valuing Yahoo as though it will fail in that mission, which is its only mission."
On the conference call this morning, the management team sounded really downbeat. I expected them to sound positive and optimistic, talking about unlocking shareholder value and focusing on Yahoo Core but they sounded like somebody had died.
As of this moment, the market value of Yahoo's stakes in Alibaba and Yahoo Japan are $32.5bn and $8.67bn respectively, while Yahoo itself has a market cap of $32.37bn.
To quote Matt Levine, "the whole point of Yahoo as a company right now is to not pay taxes on Alibaba. [...] If there was a way to avoid paying taxes on the Alibaba shares that involved burning all of Yahoo's actual businesses to the ground, Yahoo should do that all day long, and then do it again the next day. It would still add shareholder value."
"And the market, right now, is valuing Yahoo as though it will fail in that mission, which is its only mission."
Source: http://www.bloombergview.com/articles/2015-12-02/yahoo-is-lo...