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3 commentsMonday, September 14, 2009

Yahoo Exchanges Alibaba.com Stake For $150M

Solid profit on two-year investment

Yahoo should soon have about $150 million more to its name.  By selling 57.48 million shares, the Sunnyvale-based company is liquidating its stake in Chinese business-to-business site Alibaba.com and collecting a tidy profit.

Yahoo acquired its 1.14 percent stake in Alibaba.com during the company's initial public offering in 2007.  Now, Reuters reports that Yahoo will sell the stake at a 4.0-6.4 percent discount on Alibaba's most recent closing price.

That might indicate that Yahoo's in a bit of a hurry; there's a definite concern, at least, about how both Yahoo and Alibaba.com shareholders will interpret its move.  (A relevant note: Yahoo's stock is already down 1.22 percent this morning).  But even after the discount, Yahoo should realize a profit of 47 percent or more, which makes its investment look like a good one.

Here's another important detail: Yahoo is holding onto its 40 percent stake in Alibaba.com's parent company, Alibaba Group, so it's not getting out of China or anything of the sort.

John Spelich, a vice president at Alibaba Group, also stated, "We are pleased to learn of the Yahoo! decision because having broader ownership of Alibaba.com with increased liquidity and support among institutional investors is what Alibaba.com hoped to achieve when it released the cornerstone investors."

News Tags: Yahoo, Financial, Alibaba, China
About the author:
Doug is a staff writer for WebProNews. Visit WebProNews for the latest eBusiness news.

Taking money off the table

Yahoo is in need of cash, so they are selling assets, partnering up with Bing to save their butt, and implementing a new TQ (traffic qualiity) program to pay out less to their traffic supply partners......I should know I am one of them.

The latter is going to come back to haunt them as others and I take our traffic elsewhere.

That's what yahoo wants.

That's what yahoo wants.

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