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Just How Much Is Each Share Of Yahoo Worth?

This article is more than 7 years old.

Late Friday, after the closing bell, the Silicon Valley Business Journal published an article that said that Yahoo has sold a 48.6 acre piece of land in Santa Clara, California to Chinese technology company LeEco for $250 million. Yahoo had paid $106 million for the property back in 2006.

Just a day before, Citi analysts put out a report saying that, as per their calculations, Yahoo was worth $43 per share and also stated that there was a 95% chance of Yahoo's core being sold for between $5 billion to $6 billion. The analyst said that there was a 20% chance that core Yahoo (which included patents and real estate) would be sold for a sum greater than $6 billion, a 50% chance that those assets would fetch $5.5 billion and a 25% chance that those assets would sell for less than $5.5 billion.

A couple of weeks ago we heard that Verizon had offered $3 billion for core Yahoo which would include Yahoo search, Yahoo Mail, Yahoo Answers, Yahoo Finance and Yahoo News but did not include Yahoo patents and real estate.

According to Similar Web, a internet analytics site, Yahoo traffic in May 2016 was 6.5 billion page views making Yahoo the 5th most visited site in the world.

Reportedly, a group led by Quicken founder Dan Gilbert and supposedly including Warrant Buffett have also bid $5 billion for Yahoo core which includes patents and real estate as have AT&T and other private equity and venture capital firms.

So with all these confusing reports that include bids with real estate and patents and some without, let's see if we can try to come to a sensible value of Yahoo on a per share basis based on what we do know.

Yahoo has $1.45 billion in cash and equivalents, short-term marketable securities of $4.497 billion and long term marketable securities of $1.154 billion on its balance sheet as of March 31, 2016 with total debt (convertible notes) of $1.25 billion giving us approximately $6.19 per share in net cash (share count used is 945.7 million as of Yahoo's March 31, 2016 P&L) .

In addition, Yahoo has a patent portfolio that experts say is worth at least $1 billion to $1.5 billion at the minimum. Let's call that $1 billion or roughly $1.06 per share.

As of March 31, 2016, Yahoo listed $1.497 worth of assets in property and equipment on a net basis. That more than likely includes property based on what Yahoo had paid for it and is not carried at current value of property. For simplicity, let's just say those assets are worth just the amount listed or roughly $1.5 billion  or $1.59 per share.

According to various reports, Yahoo owns about 15% of Alibaba which at current prices is worth $28.82 billion to Yahoo shareholders or approximately $30.48 per share.

Yahoo also owns 36% of Yahoo Japan , which at the current valuation (YAHOY) is worth $9.2 billion or $9.72 per share to Yahoo shareholders.

Finally, factoring in the $3 billion that Verizon offered for Yahoo core (not including real estate and patents) assuming that is the winning bid, add in another $3.17 per share for Yahoo shareholders.

Adding it all together we get roughly $52.21 per share as the total value of Yahoo on a per share basis, which does not include other small investments like the one Yahoo made in Snapchat back in December 2014 at a $10 billion funding round. Chatter is that Snapchat just raised money at a $22 billion valuation level a month or so ago.

Yahoo is currently valued at $34.93 billion as per the closing price of $36.94 this past Friday.

So, simply put, at the current price of $36.94 per share, Yahoo offers almost 41% upside assuming the sale of all known Yahoo assets (net of debt) and not taking into account the value of other investments like the one Yahoo has in Snapchat.

(Long yhoo shares and calls)

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