You Should Still Bet on Yahoo’s Spinoff Plans and Here’s Why

Investors have been betting on Yahoo! Inc (NASDAQ:YHOO) mainly because of its large equity stake in Alibaba Group Holding Ltd (NYSE:BABA), which many consider is not reflected in the company’s current market value. At the end of June, 104 funds reported long positions in Yahoo in their equity portfolios, holding around $5.92 billion worth of stock in aggregate, which represented around 16% of the company. During the second quarter, the number of funds bullish on Yahoo remained flat, but the total value of their positions declined by $560 million compared to a quarter earlier.

With the struggles Yahoo is facing, the words said by John Burbank of Passport Capital in an interview in October 2014. Mr. Burbank said that one way or another Yahoo will certainly find a way to unlock the value hidden in its position in Alibaba Group Holding Ltd (NYSE:BABA) as the company had been facing pressure from certain investors, such as activist Jeff Smith’s Starboard Value. Passport Capital held 1.0 million shares of Yahoo at the end of June, while Starboard Value cut its position by almost 50% to 3.55 million shares during the second quarter.

Overall, among the funds we track, Daniel S. Och’s OZ Management tops our list of Yahoo! Inc (NASDAQ:YHOO)’s stockholders, with a total of 14.4 million shares reported in its latest 13F, followed by Christian Leone‘s Luxor Capital Group and Jeffrey Altman’s Owl Creek Asset Management of Jeffrey Altman, which own 12.64 million shares and 10.70 million shares respectively.

Disclosure: none