Altaba (NASDAQ:AABA), the investment-management fund formerly known as Yahoo!, just reported its results for the second quarter of 2018. As a reminder, all of Yahoo!'s actual operations now belong under the Verizon umbrella. Altaba itself is a highly focused investment manager whose core holdings consist of shares in Alibaba (NYSE:BABA), though the company also manages a small basket of intellectual property rights that Verizon didn't want to include in its $4.5 billion buyout deal.

Chiefly, Altaba owns 14.7% of China-based e-commerce giant Alibaba and a large stake in former subsidiary Yahoo Japan, an online search and marketing service in the land of the rising sun. Here's how these core investments have treated Altaba since April's first-quarter update.

By the numbers

Investment

Fair Value as of June 30, 2018

Fair Value as of June 30, 2017

Change

Alibaba

$71.2 billion

$54.0 billion

32%

Yahoo Japan

$6.57 billion

$8.82 billion

(26%)

Total Altaba Investments

$77.7 billion

$63.0 billion

23%

Data source: Altaba SEC filings.

What the numbers mean

Ninety-one percent of Altaba's total investment portfolio consisted of Alibaba shares by the end of June, up from 80% at the end of the first quarter. The two stocks have seen their values shifting again in the 1 1/2 months since that snapshot, sending Alibaba's share prices 7% lower while Yahoo Japan boosted its market value by 7%. As a result, the very latest reading shows Alibaba accounting for 92% of Altaba's portfolio value.

Beyond the two flagship holdings, Altaba also holds a smaller portfolio of corporate and government bonds, certificates of deposit, and other assorted financial instruments. The total market value of these holdings added up to $6.4 billion, as Altaba closed the books on the second quarter unchanged from the previous quarter.

The company continues to reshape this part of its portfolio. Altaba reduced its holdings in nearly every category of smaller investments during the second quarter, moving those funds into U.S. government bonds. That particular item swelled from $329 million to $2.47 billion over those three months.

The Excalibur IP operation, which holds the licensing rights to Yahoo!'s portfolio of technology patents, did not move over to Verizon and accounts for $635 million of Altaba's asset value today.

As of June 30, Altaba still hadn't bought or sold a single share of Alibaba or Yahoo! Japan since popping out of the Yahoo/Verizon merger. That changed in August.

Magnifying glass highlighting a golden dollar-sign key on an otherwise plain, white, and unremarkable computer keyboard.

Image source: Getty Images.

Other moves

Altaba recently sold 614 million Yahoo Japan shares to Japanese mobile-network operator SoftBank (NASDAQOTH:SFTBY), reducing its own holdings in that company by 30%. This was the first attempt to turn any of Altaba's stock holdings into cold, hard cash.

Altaba used to own roughly 35% of Yahoo Japan, and that stake has now been reduced to approximately 28%. The agreement settled on August 15, sending roughly $2 billion of said cash from SoftBank to Altaba.

At the same time, Altaba continued to exercise a $5 billion share-buyback program in a tender offer for 195 million Altaba shares. That offer was not only fully booked, but oversubscribed by 84%, meaning that nearly half of the financial institutions that reported interest in unloading their shares at Altaba's proposed terms were turned away empty-handed. Altaba spent $1.7 billion on this tender offer, roughly corresponding to the cash that was coming in from the simultaneous Yahoo Japan sale.

Altaba shares consistently trade approximately 26% below the combined value of its investment assets these days, down from the 30% discount seen in 2017. As fellow Fool Frank DiPietro explains it, the discount pricing is due to the tax costs involved in moving those international funds back to American soil.

Last year's tax reform package included some big changes to the taxation treatment of foreign profits, which includes nearly everything in Altaba's portfolio, and that was enough to shrink the discount by a few percent. The company recorded a $6.4 billion non-cash benefit from these tax changes, which explains the corresponding narrowing of the foreign taxation discount.

Anders Bylund owns shares of Alibaba Group Holding. The Motley Fool recommends Altaba. The Motley Fool has a disclosure policy.