Here's why the rumored bid prices for Yahoo are all over the place

The bidding price for Yahoo's core business could be in the range of $2 billion to $3 billion, the Wall Street Journal reported on Thursday.

That's significantly lower than the $4 billion to $8 billion range a lot of Wall Street analysts were expecting.

But soon, CNBC's David Faber disputed those numbers, calling it "completely wrong," and pointed out the reported price would be lower than even the lowest bids Yahoo received in the first round of bidding last month, citing his own sources.

Why all the chaos?

There are a lot of parties involved in Yahoo's bidding process, so it's hard to point to one simple reason. But according to SunTrust's managing director Bob Peck, there's one important question that needs to be answered to clear the confusion: what exactly is being bid for?

"We think it is unclear as to what is being bid for, and it is important to understand that there are various assets that Yahoo can potentially sell," Peck wrote in a note published Friday.

In other words, Yahoo owns a lot of different properties that it could potentially sell as its "core" business, and depending on what each bidder wants as part of its deal, the bidding price could significantly vary.

Peck notes that the $2 billion to $3 billion range would only make sense if the bid was just for Yahoo's online advertising business, which includes its online properties. That part of the business is generating roughly $300 million in earnings before interest, taxes, depreciation and amortization (EBITDA), and with a 5X multiple, which is still lower than the 7X multiple Verizon paid for AOL, Yahoo's internet business would be roughly valued at $1.5 billion.

But if you include Yahoo's web intellectual property, which Peck estimates to be in the range of $1 billion to $3 billion, the "core" value would instantly jump. Yahoo could also potentially throw its real estate property and rights to Yahoo Japan royalties, each estimated to be worth roughly $1 billion, into the mix, and the value of the deal would swing all over the place.

Yahoo has never defined what exactly it's selling as its "core" business. That's not much of a surprise since Yahoo's running an auction for its various properties and is looking to maximize its return. But it helps for potential bidders to leak lowball offers to put pressure on Yahoo and "game the situation," as CNBC's Faber speculated in his report.

"Given there are still multiple bidders, and Yahoo likely is looking for the cleanest way to maximize value, bids for the core may still come in higher than the reported $2 billion to $3 billion, depending on what assets are included in the bids," SunTrust's Peck wrote.