Yahoo’s (YHOO) future could not be more uncertain. And on Wall Street, there’s no clearer sell signal than uncertainty.

Since the beginning of 2013, of course, Yahoo stock has rallied. But that’s not because YHOO stock has seen its core business improve. Rather, it’s because investors were anticipating a windfall when Yahoo sold its remaining shares in Chinese e-commerce giant Alibaba (BABA)

But statements by the IRS and key YHOO stock holder Starboard Value LP have cast doubt on Yahoo’s ability to convert its BABA shares into  a huge payday for anyone.

And without that cash, only a moron would want to own Yahoo stock

YHOO is Doomed

One of the most well-known phrases in investing is, “Investors hate uncertainty.” Given the tremendous uncertainty that the company faces, Yahoo stock is bound to draw the ire of investors soon. Anyone holding onto Yahoo stock should sell their shares now.

In September, the IRS refused to issue a ruling on whether Yahoo could avoid paying taxes on the spin-off. Last week, YHOO shareholder Starboard indicated that it feared that the IRS could rule that the spin off is taxable, making the company’s current strategy fraught with risk. Yahoo, Starboard argued, should sell its core business and then distribute its cash to shareholders.

It’s hard to think of how a company could be facing more uncertainty than YHOO. The company’s strategic direction could not be more unpredictable, as it is facing an array of huge unknowns: Will it continue on its current course i.e. look to spin off its BABA stake  or take Starboard’s advice and look to sell its core business?  If Yahoo does continue on its current course, will the IRS agree to allow the spin-off to be carried out tax free?  How will investors react to the extremely rare if not unprecedented phenomenon of a technology company selling its core business but holding onto billions of dollars of shares of another tech company?

Moreover, the risk/reward ratio of YHOO stock is unfavorable, to put it mildly. Starboard argues, probably correctly, that Yahoo stock would pay a “great” penalty if the company continues on its current course and the IRS decides that it must pay taxes on its spin-off.  If the spin-off is allowed to proceed as planned, YHOO stock could very well still go down due to the “sell the news” phenomenon. And, as mentioned earlier, the outcome if the tech company decides to follow Starboard’s strategy is quite uncertain.

YHOO is facing other questions. The fate of its ineffectual CEO, Marissa Mayer, seems to be up in the air, and the company’s executives have been leaving in droves.  Mayer’s reactions to the latter phenomenon, which included bashing the departing employees and asking the remaining executives to sign commitments to stay with the company, seem highly questionable at best, and bizarre and likely to backfire at worst.

In short, Yahoo is a hot mess, and investors should unload Yahoo stock.

As of this writing, Larry Ramer did not hold a position in any of the aforementioned securities.