What significant negative factors affect Yahoo's valuation?
There are two very large negative factors that affect Yahoo's valuation.   The first is that their search business is in decline and continues to lose ground to Google and even Bing.  There's no sign that they have any plan or product in the works to offset this decline, so there's tremendous uncertainty about the company's forward-looking revenues. The second is that the company can't seem to decide what to do with its stake in Alibaba, clearly the company's most valuable asset.  It they sell it, the question then becomes what they plan to do with the proceeds.  Will they do share buybacks or offer a special dividend to reward investors?  Will they use some or all of the money to make strategic acquisitions that are revenue-enhancing?  Will they use it to develop new products/services?   Keep in mind one other thing here, too.  There's a world of difference between what something is valued at and what someone's willing to actually pay for it.  A patent portfolio is great and perhaps holds good value, assuming the buyer can find a way to monetize it.  How exactly was the valuation of the patents arrived at, and are they worthwhile enough for someone to pay anywhere close to that valuation?   There's more to this than meets the eye by using a first-blush look at asset valuation, and that's where the professionals come in.  My bet is that they have it right and there's something the rest of the market doesn't see or understand about it, hence questions like yours. I hope this helps. Good luck!
Knowing the answer to this question is generally not as useful as it may seem.  The stock's current price is the consensus of thousands of people who are looking at the many relevant factors (dividend rate, growth prospects, volatility, risk, industry, etc.) that determine its value.  A stock's price is the market's valuation of the cash flows it entitles you to in the future.  Researching a stock's value means trying to figure out if there is something relevant to these cash flows that the market doesn't know about or has misjudged.  Pretty much anything we can list for you here that will affect a stock's price is something the market knows about, so it's not likely to help you know if something is mispriced.  Therefore it's not useful to you. If you are not a true expert on how important the relevant factors are and how the market is reacting to them currently (and often even if you are), then you are essentially guessing.  How likely are you to catch something that the thousands of other investors have missed and how likely are you to miss something that other investors have understood?  I don't view gambling as inherently evil, but you should be clear and honest with yourself about what you are doing if you are trying to outperform the market. As people become knowledgeable about and experienced with finance, they try less and less to be the one to find an undervalued stock in their personal portfolio.  Instead they seek to hold a fully diversified portfolio with low transactions costs and build wealth in the long term without wasting time and money on the guessing game.  My suggestion for you is to transition as quickly as you can to behave like someone who knows a lot about finance. Should be noted that pacoverflow's answer is wrong. Yahoo back-adjusts all the previous (not current or future) values based on a cumulative adjustment factor. So if there's a dividend ex-date on December 19, Yahoo adjusts all the PREVIOUS (December 18 and prior) prices with a factor which is: 1 - dividend / Dec18Close There are several camps for stock valuation, and much of it boils down to your investment style.  A growth investor will not consider something with a 50x P/E ratio to be overvalued, but a value investor certainly would. I would recommend looking up the Fama-French n-factor model (it was 3-factor, I believe they have released newer papers which introduce other factors), and reading The Intelligent Investor by Benjamin Graham.  Graham's methodology is practically canon for many investors, and the methodology focuses on value, while outlining quantitative factors for determining if a stock is under or over valued. "Not cumulative volatility. It's cumulative probability density. Time value isn't linear because PDFs (probability distribution function) aren't linear. It's a type of distribution e.g. ""bell-curves"") These distributions are based on empirical data i.e. what we observe. BSM i.e. Black-Scholes-Merton includes the factors that influence an option price and include a PDF to represent the uncertainty/probability. Time value is based on historical volatility in the underlying asset price, in this case equity(stock). At the beginning, time value is high since there's time until expiration and the stock is expected to move within a certain range based on historical performance. As it nears expiration, uncertainty over the final value diminishes. This causes probability for a certain price range to become more likely.  We can relate that to how people think, which affects the variation in the stock market price. Most people who are hoping for a value increase are optimistic about their chances of winning and will hold out towards the end. They see in the past d days, the stock has moved [-2%,+5%] so as a call buyer, they're looking for that upside. With little time remaining though, their hopes quickly drop to 0 for any significant changes beyond the market price. (Likewise, people keep playing the lottery up until a certain age when they're older and suddenly determine they're never going to win.)  We see that reflected in the PDF used to represent options price movements. Thus your time value which is a function of probability decreases in a non-linear fashion.  Option price = intrinsic value + time value At expiration, your option price = intrinsic value = stock price - strike price, St >= K, and 0 for St < K." "Benchmark et al are pissed about this now because it has derailed their plans for an IPO this year. Not because they give a shit about the ""culture problems"" at the company. To the contrary - they invested in part *because* Kalanick had a reputation as being aggressive and having sharp elbows when it came to expanding into new markets and driving organic growth" Google Finance and Yahoo Finance have been transitioning their API (data interface) over the last 3 months. They are currently unreliable. If you're just interested in historical price data, I would recommend either Quandl or Tiingo (I am not affiliated with either, but I use them as data sources). Both have the same historical data (open, close, high, low, dividends, etc.) on a daily closing for thousands of Ticker symbols. Each service requires you to register and get a unique token. For basic historical data, there is no charge. I've been using both for many months and the data quality has been excellent and API (at least for python) is very easy! If you have an inclination for python software development, you can read about the drama with Google and Yahoo finance at the pandas-datareader group at https://github.com/pydata/pandas-datareader. Dividends would be a possible factor you are ignoring.  If Dell has another quarter or two to pay out dividends that could account for some of the difference there. I don't think there is a confirmed date of when the deal is done yet other than around the end of Dell's second quarter which was in the LA Times link you cited. There is also the potential for the terms of the deal to be revised that is another possibility here.  Have you examined other deals where a public company went private to see how the stock performed in the last few months before the deal closed? &gt; related to management compensation, public disclosures, investor liquidity, and portfolio concentration and use of leverage.  Could you discuss why the lack of restrictions on these subjects would make hedge funds more attractive to wealthy investors as opposed to mutual funds?