With the IRS apparently still studying the details of a potential spin-off of Yahoo! Inc. YHOO 3.43%’s stake in Alibaba Group Holding Ltd BABA 3.04%, SunTrust analyst Bob Peck released a new report explaining the four possible scenarios that Yahoo shareholders are likely to see based on exactly how the IRS chooses to handle the situation. Peck sees value in Yahoo’s stock regardless of the decision, but the outcome of the ruling could make a huge difference in where Yahoo’s share price ultimately ends up.

PLR Mystery

Yahoo and its shareholders have been waiting for a Private Letter Ruling (PLR) from the IRS regarding Alibaba, but it is looking increasingly likely that they will not receive this ruling prior to the proposed Q4 2016 spin off date. Peck goes as far as to say that it is “unclear if the IRS will even be able to issue the PLR until 2H’16.”

Four Scenarios

With the timing and content of the PLR a mystery, Peck breaks down…

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