Why Needham & Company Would Buy Yahoo! (YHOO) Today
Get Alerts YHOO Hot Sheet
Rating Summary:
18 Buy, 21 Hold, 5 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 11
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Needham & Company analyst, Laura Martin, notes that Yahoo's (NASDAQ: YHOO) share price has been volatile around press reports of a sale price between $3-7B for the core business. However, she would be a buyers of YHOO because the difference between fully taxed and a zero tax per asset is $11.29/YHOO share for BABA, $3.61/YHOO share for Yahoo Japan, and $2-4/YHOO share for the core business (depending on sale price).
This supports her investment conclusion that the primary value of selling YHOO’s core business is:
1) it’s the quickest way to have BABA and Yahoo Japan start trading on a tax-free basis, which would add $14/share (40% upside) to YHOO’s valuation
2) it nets YHOO shareholders some extra cash versus the spin-off alternative
No change to Buy rating or $40 PT.
For an analyst ratings summary and ratings history on Yahoo! click here. For more ratings news on Yahoo! click here.
Shares of Yahoo! closed at $36.97 yesterday.
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