Will Yahoo! Go Google Riding Alibaba's Wave?
By Mike Allen
Posted On September 02, 2014
"Open Scene: Blogger's Home Office, it looks like a war room right now: should we or shouldn't we? How much? Is it right? Will it happen, and more importantly when will it happen? We're talking, again, about Alibaba, and possibly the only feasible chance for the average investor to get our hands on the most highly anticipated IPO in history.
Time to Buy-In on Yahoo! / Alibaba?
It's the question on a number of investors' minds these days (especially with the ""fluke"" of last week's Radio Shack stock spike) should we jump on Marissa Mayer's (CEO of Yahoo!) bandwagon and buy-in on the basically flat-lined search engine stock?
Why would anyone want Yahoo! stock you might wonder? Well Yahoo! stock is affordable, averaging out at around $44 a share these days, doesn't go up more than that, usually doesn't go down, and it certainly does not cost $569 per share like Google, but what Google lacks is this: when the world's largest e-commerce giant goes IPO (which is supposed to happen later this month) Alibaba, Yahoo! plans on selling off 140 million of its shares in Alibaba (that's a little more than 25% of what Yahoo! owns in the company.)
Alibaba (NASDAQ: BABA) long valued at $200 Billion, would push Yahoo!'s stake in the company to over $12 Billion upon IPO and before taxes - and after the 140 million share sell off to shareholders.
Mayer has told shareholders that Yahoo! will then offer a share buyback instead of dividends, and Yahoo! must prove to Wall Street what it plans to do with the money once the transactions are complete. Basically, investors have been hearing the same ""next year it'll get better"" story for about 13 years, with Yahoo. This is the time for the company to show their cards or leave the table, especially for Mayer.
Even with Yahoo!'s purchase of Tumblr and Summly, the site relative failure to launch and it's continued, non-growth have not impressed investors, and stayed mostly off the radar with ""cooler"" IPO's like Twitter.
So, yes, we are taking the gamble and buying in on what Mayer is selling. Unfortunately, we aren't doing it for a stake in owning some of Yahoo!, but hoping to be a part of the share buyback of Alibaba. Our eyes are on the prize of Baba and like most investors, small and big-time we're gaga over Baba.
Jack Ma (Ma Yun) Executive Chairman of Alibaba & Soon-to-be China's Richest Man
We guess the main question is: can Mayer keep the momentum up and ride the Alibaba wave and maybe turn Yahoo! into Google?"
"Open Scene: Blogger's Home Office, it looks like a war room right now: should we or shouldn't we? How much? Is it right? Will it happen, and more importantly when will it happen? We're talking, again, about Alibaba, and possibly the only feasible chance for the average investor to get ...