Even though Alibaba is Chinese owned, and based in a country whose attitude toward free speech is not something I'd like to spread, somehow I'm more comfortable with them as a suitor for Yahoo than I am with Comcast or Verizon (shudder).
* Yahoo would sell the core "Yahoo" piece or businesses components leaving the new Yahoo as just a shell company with just BABA holdings. Essentially, they decouple it entirely.
* Yahoo's components would be sold and then BABA would almost certainly purchase all of the Yahoo stock, which would just be, in reality, a stock buy back from their standpoint.
* The actual Yahoo components would go to whoever bought them, but likely not to BABA.
Not sure how this plays, but it doesn't seem like anyone smart realizes Yahoo core is valuable, or at least has not been publicly announced as a suitor. It does not seem feasible to recap the company in reverse, selling BABA and betting on itself, although I think that is the move personally.
The result currently appears that BABA does a stock rebuy and Yahoo disappears entirely. The employees acquihired slowly look for better jobs over the next year as they work with the acquirer to destroy yahoo by integrateding it into whatever piece of shit idea some executive has.