Co-founder Jerry Yang's resignation is the last impediment to a deal for Yahoo (YHOO) assets.
Yang was blamed for squelching a previous deal with Microsoft (MSFT), at more than twice Yahoo's current valuation, a few years ago. As co-founder and (at the time of the failed deal) CEO, Yang had an emotional attachment to the company that is now gone.
What is on the table is either a partial or total divestment of Yahoo's investments in Yahoo Japan, run by Softbank, and China's Alibaba, run by Jack Ma, both of which have done wonderfully while Yahoo itself floundered.
Trouble is once those assets are gone, what's left? Yahoo spent tens of billions of dollars on assets that now look worthless - mail, news, messaging, advertising. Yahoo is not a leader in anything. The brand name means nothing.
So what if you get $14 billion in cash (tax-free) from the sale of the Chinese and Japanese assets. That money is going to Yahoo, not to you, and there is no way what's left is worth the $2 billion in additional value speculators are now putting on them. Any gain from the deal is baked into the stock.
I have previously suggested some ways in which some eggroll can be made from this cabbage slaw. Bringing Alibaba's commerce and payment services to U.S. consumers is one way. Payments are a great forum for innovation, and new CEO Scott Thompson comes from PayPal - any innovation would have a ready audience of prospects.
But the difference between management and an investor is that management has power and the investor has none. All an investor can do is buy, sell, and possibly use options as leverage. Investors can act only on the information before them, basing decisions on what is really happening, not what you think might happen.
This is why there are rules covering insider trading. Insiders can foretell their company's future - or part of it - in ways investors can't.
The last time I wrote about Yahoo, when Thompson was appointed and there was great hope for the future, shares were trading at about $16. Now, with Yang out and (speculators will tell you) great hope for the future, the shares are trading at about $16.
Take the hint. If something happens that can add to shareholder value you will have time to buy that news. But sell the rumors.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Additional disclosure: I changed the headline to make what I'm writing about more explicitly clear. Plus one more chance to use the pun.
