Yahoo shares are +5.4% today and +10.1% since hitting lows last friday on the Nasdaq bloodbath.
Yahoo shares had suffered over the last month on China internet bubble fears and the whisper numbers on the Alibaba valuation into the IPO being well below the bandied about $150Bn level which were assumed only 2 months ago.
At $150bn, Yahoo's SOTP (sum of the parts) valuation is well north of $40. Yahoo owns a 24% stake in Alibaba. Yahoo also owns a 35% position in Yahoo Japan (market cap of $27Bn).
If you believe that Alibaba will fetch $150bn in IPO, you get $36Bn in market cap accreted to Yahoo. Yahoo Japan is another $7Bn. This leads you to 43Bn in market cap, even after a 5.4% rally trades with a $36.8Bn market cap.
Alibaba numbers reported last night were much stronger than expected for 4Q '13. Alibaba doubled revenues realizing +66% growth/y. The fourth quarter was highlighted by the $5.6Bn shopping spree that Chinese consumers carried out on China's version of "Black Friday," known as "11:11" or "Singles Day".
At $33.00 Yahoo shares have seen solid support over the recent pullback with three different tests. The trade in Yahoo remains higher to $40.00 until we get real levels on the IPO valuation.