One of the most exciting Internet companies to follow in recent months is Yahoo (NASDAQ:YHOO), once an Internet giant and market leader and currently a war scene of activist investors, frustrated shareholders, and desperate executives. For many years, market participants and tech enthusiasts looked at Yahoo as the last remaining major company from the dot-com era that saw companies like AltaVista, Lycos, and Pets.com evaporate quickly. After some rough years, Yahoo is now dragging behind other Internet giants like Facebook (NASDAQ:FB), Alphabet Inc-C (NASDAQ:GOOG), Baidu (NASDAQ:BIDU) and more while trying to keep up with the rapidly changing environment.

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Yahoo has failed numerous times to execute broad fundamental changes to drive the company back to a growth path, and now it has entered a last-ditch fight to save what’s left of the enterprise. When talking about saving Yahoo, it’s not clear anymore what about the company is worth saving – is it the failing core Internet business or the holding company that owns large stock portions of Alibaba (NYSE:BABA), Yahoo Japan, and Hortonworks (NASDAQ:HDP)?

On one hand, Yahoo keeps its core Internet business intact under the belief that current management could get it back to its glory days. This scenario includes selling Yahoo’s most prominent assets, Alibaba and possibly even Yahoo Japan, to third-party companies that could use the large stake of stocks to take central positions in these firms. Potential buyers for the Alibaba stake include Amazon (NASDAQ:AMZN), eBay (NASDAQ:EBAY), and Alibaba (NYSE:BABA) itself. Alibaba could use this opportunity to buy back these stocks and block future penetration of rivals into its board and management. Potential buyers for the Yahoo Japan stake include Softbank (OTC:SFTBY), Rakuten, Tencent (OTC:TCEHY), and even Baidu (NASDAQ:BIDU) that could use the Yahoo Japan stake to improve its penetration into the Japanese market. For now, it seems that the potential Aabaco spin-off will not take place, so I will not discuss this opportunity.

This scenario of selling the Alibaba and Yahoo Japan stakes means that CEO Mayer and its staff will need to present an ambitious plan to trigger a fundamental turnaround in Yahoo’s core business. As Yahoo’s management has failed to do so in the last three years, I’m very doubtful that they will succeed to it now when they are under enormous pressure from shareholders.

On the other hand, Yahoo could remain a holding company and sell its core business to the highest bidder. This scenario would mean that Yahoo as we know it would no longer exist, and it would become a subsidiary or only a brand in Verizon (NYSE:VZ), AOL (NYSE:AOL) or a P-E fund. After selling the core business, Yahoo will enter a new territory and face the dilemma of whether to remain a holding company or to sell the remaining parts. This scenario is the most favorable for many investors as Yahoo would clean the failing, unwanted internet business for a decent price, and would have the potential to drive future growth.

These two scenarios are complicated and include many moving components that change every day. However, they both have a few things in common – they acknowledge that Yahoo needs to undergo a fundamental shift and that shareholders will not wait much longer to unlock the value that Yahoo currently withholds. This understanding will be for the stockholders' best interest and drive significant value appreciation of Yahoo stock.

However, it’s going to be a very bumpy road until we get there. The common perception is that value investors should stay away from Yahoo stock in 2016. However, I believe that to generate remarkable returns this year, investors will need to take higher risks than before. When we are in the middle of the bloodbath in Yahoo stock, it might be a good opportunity to leap ahead and benefit from the upside later in the year. Investors could take advantage of the current sell-off in the market and buy Yahoo stock for sub-$30 prices or buy call options to benefit from the potential upside.