Yahoo! Inc. (NASDAQ:YHOO) is increasingly in the news since last few weeks, even since The Alibaba Group’s IPO date is approaching, but that doesn’t answer why the company’s stock has been on an unstoppable ride up since late afternoon yesterday. Yahoo! Inc. (NASDAQ:YHOO)’s stock was hovering around the $33.8 figure throughout the day yesterday and then it suddenly spiked up and continued to rise to end the day at $34.71. The stock continues its run today as well, reaching $36.17 at 11:00 A.M. on the NASDAQ.
While most of the Street is speculating on the reason behind the sudden rise in Yahoo! Inc. (NASDAQ:YHOO) stock, some people are attributing the rise to the article written by Forbes’ contributor, Eric Jackson, in which he gave compelling reasons on why The Alibaba Group or Japan’s Softbank Corp will acquire Yahoo! Inc. (NASDAQ:YHOO). The article titled, “Is Alibaba Or SoftBank About To Buy Yahoo?” was published at 2:50 P.M. on Wednesday and Yahoo! Inc. (NASDAQ:YHOO)’s stock shot up almost immediately.
“If either Alibaba or SoftBank bought Yahoo, they wouldn’t be taxpayers on the investment stakes they’d be getting back. That means they’d be getting an even bigger discount on the price today.,” Mr. Jackson wrote in his article.
He went on to explain the math behind the reasoning, explaining how the Wall Street analysts have discounted in their current price targets of Yahoo! Inc. (NASDAQ:YHOO) the tax bill of $10-20 billion on Alibaba IPO and on the $3 billion stake the Yahoo Japan the company would have to pay for these stakes sales. Mr. Anderson then went on to calculate the value of assets that the company holds, giving Yahoo! Inc. (NASDAQ:YHOO)’s assets per share value of $56, much higher than where the stock trades currently.
A few days ago, StockTwits Chairman Howard Lindzon was also heard saying, how Yahoo! Inc. (NASDAQ:YHOO)’s stock is worth nothing without the Alibaba deal.