Yahoo Inc. assets consist of cash, a stake in Yahoo Japan, a 15% stake in Alibab
ID: 463020 • Letter: Y
Question
Yahoo Inc. assets consist of cash, a stake in Yahoo Japan, a 15% stake in Alibaba - China's mega e-commerce firm, and operating assets of its core internet business. Analysts are estimating that the combined value of cash + Yahoo Japan stake + Alibaba stake now exceeds the total value of Yahoo Inc. implying thet Yahoo's operating profit assets/core business has a negative value.
2. What restructuring options does Yahoo have to realize the full value for its core business? Discuss the pros and cons of the options.
Explanation / Answer
Restructuring Options in front of Yahoo –
Yahoo exploring the separation of its core business – minus its lucrative stake in Alibaba – is worth.
At present that figure is negative ($13 billion).
The value of stake in Alibaba is $32.5billion and its stake in Yahoo Japan is $ 8.6 billion. The company’s net cash – or cash minus debt- is $ 4.2 billion.
Since Mayer took the charge in July 2012, the Yahoo’s stock price is up 116%, which was the result of restructuring efforts done by the predecessor of Mayer.
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