Internet giant Yahoo (YHOO) recently announced it was moving forward with its spin-off to shareholders of its Alibaba (BABA) shares even though the IRS hasn't yet given it a ruling on the tax implications. The spin-off is expected to be completed sometime in the fourth quarter of this year.
Tracey Ryniec, David Bartosiak and Todd Bunton, Stock Strategists at Zacks Investment Research, discuss the spin-off implications for Yahoo shareholders.
What are shareholders valuing Yahoo's core business at if the spin-off is tax free versus not tax free?
Is there any value to Yahoo at all after the spin-off? Or are investors basically valuing the core business as worthless?
Yahoo's earnings are expected to fall 76% this year compared to last. Revenue has been flat year over year. The core business is still struggling to find itself.
David drills down into Yahoo's dismal stock chart. Shares are at 2-year lows. Should investors take a new look at Yahoo at these levels?
Want to know more about Alibaba? On Sep 24, 2015, Tracey and David wondered how low Alibaba's shares would go after they hit new post-IPO lows. You can catch that discussion here: http://www.zacks.com/stock/news/191309/alibaba-how-low-will-the-stock-go
Watch last week's discussion on Alibaba.