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Lily Allen - The Fear

on April 13, 2009

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Yahoo - turning around or just a shell for Alibaba?

Yahoo just announced its results for the first quarter of 2014. The shares jumped up 7% or so, not quite to the heights at the end of 2013, but close. At first glance it looks like Marissa Mayer is coming up to 2 years at Yahoo with signs of some operational improvement, perhaps even the long waited turn around. But then I came across this article in the Atlantic: How Is Yahoo So Worthless? - Derek Thompson - The Atlantic The argument is that Yahoo shares have doubled over 2 years because of the increasing value of their share in Alibaba and Yahoo Japan. Now, there can be a lot of discussion on how to correctly value the interest in these assets. Wall Street certainly seem very excited about the potential value of Alibaba, and Yahoo is the only way to play it. However, there are likely complex tax implications once the IPO happens, expected in Q3 this year, so the valuation in the chart above is perhaps inflated. However, perception and belief play a larger role in financial...

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The end of 2% inflation?

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