OT: stock market - Yahoo shares and Alibaba spin

[eddief]

I should know the answer, but I don't. So Yahoo spun off Alibaba yesterday. Let's say I currently own 1000 shares in Yahoo. I know core Yahoo is challenged, but mostly stable, and Mayer is working her butt off to grow mobile.

What happens to those shares if I hold until the spin deal is done at the end of the year?

If Alibaba increases in value from now until the spin is done, do Yahoo share continue to rise in parallel?

[verticaldoug]

Think of Yahoo as a sum of 3 parts:
Core Yahoo + Yahoo Japan Holding + Alibaba Holding

Until Yahoo goes ex-dividend with spinco, YHOO continues to own alibaba.

[crownjewelwl]

I should know the answer, but I don't. So Yahoo spun off Alibaba yesterday. Let's say I currently own 1000 shares in Yahoo. I know core Yahoo is challenged, but mostly stable, and Mayer is working her butt off to grow mobile.

What happens to those shares if I hold until the spin deal is done at the end of the year?

If Alibaba increases in value from now until the spin is done, do Yahoo share continue to rise in parallel?

in theory, YHOO should move in kind with any appreciation in BABA...in fact, since YHOO is spinning off the shares, it should probably track better since there is a separation event occurring...this however, presupposes that YHOO (ex-BABA) should trade fundamentally

you can track the "stub" value for YHOO i.e., YHOO less the proportionate value of the BABA it owns

[eddief]

what will my current 1000 share of Yhoo turn into? Some shares in Spinco and some shares in Yhoo?

[bargainguy]

From Reuters:

Yahoo said its board of directors has authorized a plan to spin off the stake, tax-free, into a newly formed independent registered investment company. The stock of the company will be distributed pro-rata to Yahoo shareholders and the transaction is expected to close in the fourth quarter of 2015, Yahoo said.

The new entity will include Yahoo's 384 million shares in Alibaba as well as an unspecified "legacy, ancillary" Yahoo business, the company said.

[verticaldoug]

http://files.shareholder.com/downloads/YHOO/3905491248x0x805290/B0921183-B8AE-4E57-9730-7C37208E7C0C/YHOO_TransactionAnnouncement.pdf

The simple plan from Yahoo investor site.

[crownjewelwl]

what will my current 1000 share of Yhoo turn into? Some shares in Spinco and some shares in Yhoo?

correct...1000 shares of yhoo and pro-rated shares of BABA spinco

[likebikes]

this probably isn't the best place for advice like this.

[54ny77]

They're going to reincorporate in the Cayman Islands and launch a new platform, Yalibabahoo.