The New York Times is reporting that Yahoo tomorrow will consider a proposal to sell its stakes in Yahoo Japan and Alibaba Group, in a transaction that would be worth approximately $17 billion. But here’s the thing: Yahoo’s entire market cap is just over $18 billion.
Does that really mean Yahoo (YHOO) itself is only worth around $1 billion? That puts it in the same league as AOL (AOL) — despite having more than twice the revenues — and that’s not exactly a league where anyone wants to be playing right now.
From the NY Times:
Were Yahoo to reject the deal, then Alibaba and Softbank may proceed with a previously-discussed bid to buy all of Yahoo, in concert with private equity firms Bain Capital and The Blackstone Group (BX). It also may accept one of two competing minority stake offers led by Silver Lake Partners and TPG Capital.
But back to the dollar amount. Is it really possible that Yahoo would be valued the same as company that generate half the revenue? Can a company’s non-core assets be worth 17x their core business? We should know soon. In the meantime, Yahoo shares have spiked more than 6% on the report.
Update: Some readers have pointed out that Yahoo currently has $2.11 billion of cash sitting on its balance sheet. Does that somehow make the value of its U.S. assets negative? Something seems very wrong here…
Sign up for my daily email newsletter on deals and deal-makers: GetTermSheet.com