Mystery Solved

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I first laid hands on a personal computer in 1979, and I’ve been online since 1981. Technology has saturated my life long before most people had even considered it. I bought my first Macintosh in early 1984, the iPhone on the day it came out, the iPad on the day it came out. I live in the Silicon Valley, and they’ll probably bury me here.

Having said all that, I have poo-poo’d Yahoo right from the get-go. 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 they had a portion of Alibaba, and because of that, it was goosing its stock price – – but if you had asked me, I’d have guessed that it wasn’t that big a portion of Yahoo’s value. Ummm……..wrong.

I did a little digging, and Yahoo’s 15% stake in Alibaba constitutes virtually the entire value of YHOO. Roughly speaking, this 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, oh, 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.