YHOO was discounted on their BABA stake largely because nobody believed they could divest that holding without paying a huge tax bill

Even after Yahoo! was spun out and the old corp was turned into AltBaba with only the BABA and Yahoo Japan holding left over it still traded at a discount to the value of it's actual holdings for this reason

Matt Levine kinda explains that part here:

https://www.bloomberg.com/opinion/articles/2018-06-08/old-ya...

Second part also: investors didn't trust YHOO management not to keep plunging good money after poorly invested money into more bad ideas - that also had a negative value, until the sale was announced and it didn't

edit: should also mention that Verizon are incentivized to write-down the value of both Yahoo and AOL here for a host of reasons - one of which is to reduce their tax bill. They probably /s are both worth a lot more than zero if being sold on the open market today