03-17-2014, 11:37 PM
Shares of Yahoo! (YHOO) today closed up 37 cents, or 1%, at $37.60, in a down market, perhaps reflecting at least in part headlines yesterday and today about a potential listing in the U.S. of shares of Chinese e-commerce titan Alibaba Group Holding, in which Yahoo! owns a 24% stake... We see Yahoo! netting $9.3B in after-tax proceeds from the initial share sale at the IPO based on a $150B valuation for Alibaba. Subsequently, we see Yahoo!’s remaining after-tax stake valued at near $20B. We believe Yahoo! uses the proceeds for share repurchases. There is potentially further valuation upside tied to the performance of Yahoo Japan (4689JP).