This is a good sign for our economy but not a good sign for Corporate Wages:
Once people begin to realize there are other jobs out there, they will begin quitting or asking for more wages and then, finally, we'll start to get the good kind of inflation!
YHOO/Bshing - Thanks for reminding me. Yes, because of - MATH!!! Didn't get a great sell-off but still way behind BABA, which popped 4% today. Here's what I said yesterday + trade idea:
YHOO very interesting below $30. Just had to summarize for a reporter and here's what I said:
The IRS did not reject a request for the spin-off. What the IRS did (or did not do) is they refused to issue a ruling that would have confirmed that the planned spin off would be a tax free event. By refusing to give an opinion, the IRS has introduced a level of uncertainty that Yahoo cannot live with and they are then forced to cancel the spin-off, for fear that, if they did go through with it, all the shareholders getting new Alibaba shares would have to pay tax on them as if they were cash.
What Yahoo can still probably do is create a holding company for it's Alibaba stake (about $23Bn) and that should have no tax consequences, though the function of that holding company would be difficult to understand.
Yahoo has been moving in lock-step with BABA since BABA went public. At the time it was worth $40Bn and is now down about 40% and YHOO's stock value has dropped to $29Bn, $23.25Bn of which is 382M $61 shares of BABA and the company is sitting on over $6Bn in cash from previous sales of BABA stock (taxes already paid). That gives YHOO an enterprise value of NEGATIVE $800Bn but (and it's a big but) if they incur taxes while liquidating the BABA shares, there goes $8.2Bn (35%) up in smoke and shareholder lawsuits would fly, and everyone involved in the mishandling of this transaction would have their careers ruined.
