Long Yahoo [based on sum-of-parts or negative stub value arbitrage]

Yahoo_5daychart_ after hours

Yahoo_5daychart_ afterhours

Yahoo’s actual own core business (which generates more than $1 billion a year) is now valued at -$500 million, based on negative stub valuation:
Yahoo Stock Gets Crushed As Alibaba IPOs — Core Business Now Valued At Less Than Zero

Pretty good numbers crunching valuations carried out here, with some event-conditional Yahoo/Softbank/Alibaba scenario-ing, and a useful table with a handy and quick YHOO/BABA price ratio heuristic:
Imma Be a BABA Bull: Yahoo, the Morning After

yahoo_valuation_table

yahoo_valuation_table

So. Go YHOO/BABA? (long YHOO/short BABA)
What’s the stock borrow fee like on BABA, and is it even available for short borrowing?

How many “relative value/event arbitrage” traders got killed putting on the long 3Com/short Palm value trade 15 years ago…

Safer to just long YHOO.

[Sum-of-parts or negative stub value arbitrage, 3Com/Palm example:
Negative Stubs – a review of the equity carve-out of Palm from 3Com
“Since stock prices can never fall below zero, a negative stub value is highly unusual.”
]

Brings back memories of my old series of PalmPilots, from the bulky plasticky IIIc to the sleek metallic Palm V.

Palm IIIc

Palm IIIc

Palm V

Palm V

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