Christian Olesen presented his in-depth investment thesis on Yahoo (Nasdaq: YHOO) at Best Ideas 2017.
Yahoo trades at a significant discount to the value of its assets. After the acquisition of Yahoo’s core business for cash by Verizon, which is expected to close in the next few months, Yahoo will have assets that are currently worth in excess of $57 per share, yet Yahoo stock only trades at $41 per share. The company has clearly stated that its intention is to distribute substantially all cash to shareholders after the acquisition by Verizon is consummated. Moreover, the company has pledged to maximize the after-tax value of stakes in Alibaba and Yahoo Japan, which account for the great majority of the company’s value. Christian believes that buying Yahoo stock while hedging the exposure to Alibaba and Yahoo Japan by selling short those securities offers an attractive investment return with very modest risk. In his base case scenario, this investment generates a 21% return over less than one year, even though the business risks are hedged due to short positions in Alibaba and Yahoo Japan.
About the instructor:
Christian Olesen is the investment manager of the Olesen Value Fund. Previously, Christian worked in a dual role of Analyst and Trader for Xaraf Management, a group within Paloma Partners that focuses on a variety of equity and credit strategies. Before that, Christian was Senior Associate in the research department of DebtTraders Group, a New York-based broker-dealer specializing in distressed and high yield bonds, and Senior Financial Analyst in the corporate finance advisory services group of Stern Stewart & Co., a New York-based financial advisory firm best known for its proprietary EVA® (Economic Value Added) concept. Christian holds a B.S. in Economics, with concentrations in Finance and Accounting, from The Wharton School, University of Pennsylvania. He also holds the CFA (Chartered Financial Analyst) designation.
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