What's Altaba Worth?

Our valuation of the new closed-end investment management company is based on Morningstar’s 14% increase in Alibaba’s fair value estimate to $148 per ADS, along with the valuation of Yahoo Japan. We have also taken into account possible tax liabilities based on unrealized capital gains of those two holdings. Further, we are assuming a potential $448 million liability related to Yahoo’s data breaches, of which Altaba will be responsible for 50%. Last, we have included net cash of $10 billion in our valuation, representing the $4.48 billion received from Verizon and a cash balance of $7 billion reported on Yahoo’s March 2017 balance sheet, partially offset by $1.3 billion in senior convertible notes due in 2018. We also note that Yahoo is using $3 billion of its cash in a self-tender offer to repurchase its shares and create liquidity for shareholders that wanted to get out before the closing of the Verizon deal. The company has stated that the tender offer will expire on June 16.

Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.