Friday 26 December 2014
Sunday 14 December 2014
Update: Yahoo Stub
Ever since I made the Long YHOO/Short BABA & YAHOF pitch, things have been going my way.
YHOO is up 23%, BABA up 12% and YAHOF down 12%. On a net basis, this stub trade has been phenomenal, primarily because it is technically an infinite IRR trade.
I view YHOO as a BABA alternative trading at a discount. Even with the massive YHOO price appreciation, EV has only increased by $5B, from a NEGATIVE $12.5B to a NEGATIVE $7.5B. The market has accolade YHOO at a significant discount to book value because it is valuing what it believes to be value destructive actions by management. I disagree with this tenet.
I believe that MM is not as value destructive as what people believe she is. In fact, in the long run, she might actually be value accretive. It is hard to say, but at a NEGATIVE $7.5B EV, at current prices, YHOO should be worth at least $57.50 ascribing no value to YHOO core business and MM value.
YHOO is up 23%, BABA up 12% and YAHOF down 12%. On a net basis, this stub trade has been phenomenal, primarily because it is technically an infinite IRR trade.
I view YHOO as a BABA alternative trading at a discount. Even with the massive YHOO price appreciation, EV has only increased by $5B, from a NEGATIVE $12.5B to a NEGATIVE $7.5B. The market has accolade YHOO at a significant discount to book value because it is valuing what it believes to be value destructive actions by management. I disagree with this tenet.
I believe that MM is not as value destructive as what people believe she is. In fact, in the long run, she might actually be value accretive. It is hard to say, but at a NEGATIVE $7.5B EV, at current prices, YHOO should be worth at least $57.50 ascribing no value to YHOO core business and MM value.
Tribune Publishing
https://www.dropbox.com/s/1igrrzjxps9wxi8/Long%20Tribune%20Publishing%20%28TPUB%29.pdf?dl=0
Friday 12 December 2014
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