Why Yahoo could sell for less than its cash on hand

Why Yahoo could sell for less than its cash on hand: "
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Wall Street looked for clues on the future of Yahoo Tuesday as the internet company reported earnings that could influence its potential sale. But earnings left at least one important question unanswered: What's the floor of a bid for Yahoo?

 Although pressure mounts for Yahoo to sell itself to the highest bidder, the plan is far from final, experts told CNBC. Indeed, Yahoo hasn't committed to either a reverse-spin-off of its Asian assets nor a sale of its core business — and it's a mystery what's up for auction. 


Despite declining revenues, Yahoo announced Tuesday it had $7.1 billion in cash. But media outlets like Re/code and The Wall Street Journal have sources that say bids are likely to come in a range of $4 billion to $8 billion dollars.

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So if Yahoo has $7.1 billion in cash on hand, why would a potential buyer think they could get $3 billion less?
"It is still not clear what is being offered in the auction, but I can almost guarantee you that it does not include cash on hand," said Aswath Damodaran, finance professor at the Stern School of Business, who has owned shares of Yahoo.
Damodaran initially valued Yahoo in 2014, calling the company "a puzzle, a mystery and an enigma." He found the core business was worth $4.6 billion and has declined in value since." 'via Blog this'