I have poo-poo’d Yahoo! (NASDAQ:YHOO) from the start. 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 it had a portion of Alibaba Group Holdings Ltd. (NYSE:BABA), and because of that, it was goosing its stock price -- but if you'd asked me, I’d have guessed that it wasn’t that big a portion of Yahoo’s value. I was wrong.
I did a little digging and Yahoo’s 15% stake in Alibaba constitutes virtually the entire value of YHOO. Roughly speaking, that stake is worth nearly $44 billion.
Whereas the market cap of Yahoo, including the aforementioned stake, is a little more than $47 billion.
Which gives Yahoo an enterprise value of 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.
