US internet firm Yahoo announced in February that it was looking at "strategic alternatives" for its core internet business. Verizon declined to comment on the reports. A formal announcement is expected on Monday before US markets open for trading. Over the last few years Yahoo has struggled to keep up with the changing internet advertising landscape, with some analysts arguing that it has failed to remain relevant in many of its core markets.
The key question the shareholders should ask is what is the basis of this valuation. Verizon has value because it owns licenses to spectrum. That is an asset and one can value that. Really.
However what does Yahoo own? Customers? No, they can disappear in a heart beat. Then what is the basis for this valuation? Good question. Let's see how they spin this one.
Now look at the Balance Sheet.
| In Millions of USD (except for per share items) | As of 2016-06-30 |
| Cash & Equivalents | 1,325.40 |
| Short Term Investments | 5,055.68 |
| Cash and Short Term Investments | 6,381.09 |
| Accounts Receivable - Trade, Net | 991.18 |
| Receivables - Other | - |
| Total Receivables, Net | 991.18 |
| Total Inventory | - |
| Prepaid Expenses | 224.73 |
| Other Current Assets, Total | - |
| Total Current Assets | 7,597.00 |
| Property/Plant/Equipment, Total - Gross | - |
| Accumulated Depreciation, Total | - |
| Goodwill, Net | 431.37 |
| Intangibles, Net | 202.12 |
| Long Term Investments | 34,412.45 |
| Other Long Term Assets, Total | 245.12 |
| Total Assets | 44,214.29 |
| Accounts Payable | 171.62 |
| Accrued Expenses | 982.86 |
| Notes Payable/Short Term Debt | - |
| Current Port. of LT Debt/Capital Leases | - |
| Other Current liabilities, Total | 122.03 |
| Total Current Liabilities | 1,276.51 |
| Long Term Debt | 1,266.28 |
| Capital Lease Obligations | - |
| Total Long Term Debt | 1,266.28 |
| Total Debt | 1,266.28 |
| Deferred Income Tax | 13,115.82 |
| Minority Interest | 32.41 |
| Other Liabilities, Total | 159.38 |
| Total Liabilities & Shareholders' Equity | 15,850.40 |
| Redeemable Preferred Stock, Total | - |
| Preferred Stock - Non Redeemable, Net | - |
| Common Stock, Total | - |
| Additional Paid-In Capital | - |
| Retained Earnings (Accumulated Deficit) | - |
| Treasury Stock - Common | - |
| Other Equity, Total | 28,363.89 |
| Total Equity | 28,363.89 |
| Total Liabilities & Shareholders' Equity | 44,214.29 |
| Shares Outs - Common Stock Primary Issue | - |
| Total Common Shares Outstanding | 948.25 |
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