How Does Yahoo! Inc (YHOO) Measure Sans Alibaba Group Holding Limited (BABA)?

Yahoo! Inc. (YHOO)

Subsequent to Alibaba Group Holding Limited (NYSE:BABA)’s IPO in US on 19th September, 2014, the most pertinent question on everyone’s lips concerns Yahoo! Inc (NASDAQ:YHOO)’s future. A couple of days after the IPO, Yahoo lost out not only in terms of its share value but also faced deterioration in its core value. Several reasons had been cited for this downfall, primary amongst which was that Yahoo had chosen to dispose off a part of its share at the opening price of $68. Had the company waited for Alibaba to start trading, it would have garnered another $3 billion for its kitty.

More than a month later, financial gurus are still wondering what the true worth of Yahoo! Inc (NASDAQ:YHOO) is now that Alibaba Group Holding Limited (NYSE:BABA) is no longer a part of the picture. CNBC dwelt on this issue in detail with John Jannarone, a senior writer with Digital. The fact that Yahoo’s shares have jumped by as much as 20% over the last 10 days has added fuel to the fire, especially since it is the highest level reached by the company in more than a decade. Last time that the company’s shares were hovering around the same price was in the year 2000 when the dotcom bubble was in the air.

Yahoo! Inc. (YHOO)

While people have settled for the most obvious explanation, meaning rise in Alibaba Group Holding Limited (NYSE:BABA)’s share price by the same percentage, John Jannarone feels that there is more to the Yahoo! Inc (NASDAQ:YHOO) story than what meets the eye. According to him, it is the company’s core business, meaning search engine and advertising that is responsible for the rise. Another reason is Yahoo CEO Marissa Meyer’s acquisition spree which has been under fire from several quarters and yet is defended by her as being imperative to revive a flailing unit.

Particularly vocal in its criticism has been Starboard Value but overall, even Jim Cramer has recommended both Alibaba Group Holding Limited (NYSE:BABA) and Yahoo! Inc (NASDAQ:YHOO) provided it is successful in keeping its taxes under check.

This article has been written by Vinita Basu.

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