Phil Taller Altaba Inc AABA-Q SELL Jun 28, 2013

Their core business is on the block, and he thinks there are a bunch of bidders for it. There is also their position in Ali Baba (BABA-N) which is the vast majority of the stock price. This is a trade, not an investment. If you own, he would get out on any little pop.

Currently going through a sales process and are down to their final bids. You have to believe you will get something much higher to justify holding it. Most people don’t expect a much higher bid from where the stock is right now. If you own, he would lean towards Selling and save your capital.

This is really lacking in search. It is really hard to see a catalyst going forward. The company will be sold off and the best parts taken. He sees no reason to hold this.

(A Top Pick Feb 18/16. Down 55.44%.) *Short*. He closed this Short. There is an offer to buy the company, which was his catalyst for getting out. This is a property that has really struggled for a long time.

From a sum of the parts basis, this is undervalued. The risk is that you have to be careful of Chinese companies. The primary value in this company is there shareholding in Ali Baba (BABA-N). There is a lot of great growth in China, but Ali Baba does not pay a dividend. If something bad happens in China, the primary determinant in this stock is going to get hit.

There are still reasons to hang onto this. Their Internet business is being sold to Verizon. What you have left is the stub, which is basically a holding company of Ali Baba (BABA-N) and Yahoo Japan. Looking at the current price of Ali Baba, and multiply it times the number of shares that Yahoo owns, the Yahoo price is below its holdings.

The company is planning a Dutch auction, offering to buy back $3 billion worth of stock. Currently they have slightly negative to sort of low single digit growth, and at the same time they are asking for a multiple year. This is not a bad exit point. There are probably better spaces to be in at this time.

For now, this just represents their position in Alibaba (BABA-N), so it is kind of a reflection on how Alibaba is doing. Alibaba is doing very well, but the valuation is very high and very difficult to assess a downsize if something goes wrong.

This is the old Yahoo. Short put. 90% of the assets are shares in Alibaba, and AABA is the cheap way to play this. Place a $75 put in October. You'll get $4.50/share. He thinks Alibaba will stay above $75, so you'll keep the premium.