No. The market won't value Yahoo's Alibaba stake at market value because it's an illiquid and large stake. Were Yahoo to attempt to sell it, the price would collapse. Further, Alibaba's value is possibly inflated as well, but since prices are set at the margins, it might take a while to find out. Thus, there is no reason for Yahoo's stock to track Alibaba directly.

A similar phenomenon occurred when Cypress owned half of SunPower, but its SunPower stake virtually represented its market cap. Of course, SunPower was to crater later on...

It's interesting because i heard the quote on bloombergwest today, which peeked my interest.