Mystery Solved

I first laid hands on a personal computer in 1979, and I’ve been online since 1981. Technology has saturated my life long before most people had even considered it. I bought my first Macintosh in early 1984, the iPhone on the day it came out, the iPad on the day it came out. I live in the Silicon Valley, and they’ll probably bury me here.

Having said all that, I have poo-poo’d Yahoo right from the get-go. I’ve always thought it was a junk site, and I’ve been utterly bewildered by its skyrocketing stock price. I had some vague knowledge that they had a portion of Alibaba, and because of that, it was goosing its stock price – but if you had asked me, I’d have guessed that it wasn’t that big a portion of Yahoo’s value. Ummm...wrong.

I did a little digging, and Yahoo’s 15% stake in Alibaba constitutes virtually the entire value of YHOO. Roughly speaking, this stake is worth nearly $44 billion…

1113-baba

Whereas the market cap of Yahoo, including the aforementioned stake, is a little more than $47 billion.

1113-yhoofund

Which gives Yahoo an enterprise value of, oh, somewhere between three and four bucks a share. I daresay 99% of the public gives credit for the amazing turnaround and tremendous increase in shareholder value to the comely blonde who runs the place. It turns out, Yahoo just got lucky. Right place. Right time. Right stock. YHOO=BABA.

1113-yhoo

 

This blog is not, and have never been, investment advice. It is a place that allows me to express my own views on the market and specific securities – as well as make whatever cultural ...

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Clark Winslow 3 years ago Member's comment

I did the same calculation yesterday & discussed with my Bloomberg rep. $YHOO owns BABA CN & not US. CN isn't traded. YHOO 1/2

Joel Santiago 3 years ago Member's comment

Great article. But your write up is missing the cash on hand (minus liabilities) of ~7B and $YHOO stake in Yahoo Japan of ~$8B...