Investors Could Reap Billions in Yahoo! (YHOO) Breakup

Yahoo! (Nasdaq: YHOO) is positive Tuesday following commentary that investors could receive a windfall on a split.

Bloomberg notes that Yahoo!'s market cap could rise $11 billion should the company following suggestions from Starboard Value. Late last week, Starboard said Yahoo should sell its stakes in Alibaba (NYSE: BABA) and Yahoo! Japan and then merge with AOL (NYSE: AOL).

Yahoo! has made about $1.3 billion in acquisitions since 2012, which is when current CEO Marissa Mayer took the helm. Since the, EBITDA has fallen by almost half as revenue has also continued to slip. Some analysts think Yahoo! could move to $50 or up to $57 in a breakup.

SoftBank or Alibaba might also move to acquire Yahoo!, which is a suggestion not put forth by Starboard.

While AOL has a much smaller market cap than Yahoo!, all of Yahoo!'s value is being held in its Asia stakes. Gabelli sees Yahoo! at $51: $7.50 from Yahoo! Japan, $34 from the Alibaba stake, and $9 in cash.

You can view the full Starboard letter here. Yahoo! is up about 1.4 percent.

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