The funny thing is that Yahoo's alibaba stake + cash on hand is worth something like 40 billion, but yahoo's current market cap is ~35 billion. AKA, Yahoo's core business is worth negative 5 billion dollars.
It's the Alibaba stake and cash that are being discounted, as assets typically are on a public balance sheet.
AOL was worth $4.4 billion to Verizon, and was worth several billion publicly traded. Yahoo's operating business is blatantly worth more.
Simple test: show me one example in the last several decades, of a publicly traded company that was sporting a positive balance sheet, with billions in revenue, that traded with a negative market cap. You won't find a single example. It's also the same reason Yahoo didn't trade for a negative valuation prior to Alibaba becoming highly valuable: Yahoo's core business is actually worth something.
The reason why the core business has a negative value is that investors are afraid that Marissa is going to use the money from an Alibaba sale to fund an unprofitable, failed turnaround.
Meyers and management isn't going to let anyone do that if they can help it. Just like how last time the management didn't let anyone do it.
Management != the shareholders. Just because the right thing for shareholders is to sell yahoo doesn't mean that management will go along with it.
THAT is why the core business is worth negative 5 billion dollars. Because management will do everything to drive the company into the ground in order to prevent themselves from loosing control.
