Greenlight Capital, the hedge fund run by investor David Einhorn, acquired a significant long position in Yahoo Inc during the first quarter, citing Yahoo's most valuable asset as its stake in China's Alibaba Group.
In a letter to shareholders on Friday, a copy of which was obtained by Reuters, Greenlight disclosed the investment in Yahoo.
Shares of Yahoo were up 2.6 percent at $18.16 in afternoon trading on Monday.
We would not be surprised if YHOO's 40 percent stake in Alibaba Group alone was ultimately worth YHOO's entire current market value, the letter said.
A spokesman for Greenlight Capital declined to comment.
(Reporting by Alexei Oreskovic and Jennifer Ablan; Editing by Tim Dobbyn)