Are Third Point's Loeb and Yahoo! (YHOO) CEO Thompson Like Minded on Alibaba? Maybe...
Tweet
Share
E-mail
Get Alerts YHOO Hot Sheet
Join SI Premium – FREE
Hedge fund man, activist investor, and avid surfer Dan Loeb has been pressing Yahoo! (Nasdaq: YHOO) for a management change and inserted a handful of handpicked candidates -- as well as himself -- for spots on Yahoo!'s Board. Maybe it's time for Yahoo! shareholders to fully embrace Mr. Loeb and his ideas for the beleaguered Internet firm.
Reported earlier, the WSJ cites Loeb's desire to keep Yahoo!'s stake in Alibaba, the largest e-Commerce company in China. In a letter to his investors, Loeb cites studies showing China's e-Commerce market may overtake that of the U.S. by 2015, with Alibaba leading the charge.
Currently, Yahoo! holds a 40 percent stake in Alibaba. The two have been in talks recently of how Yahoo! might lower its stake to about 15 percent, with the most recent being a "cash-rich split-off" in which Alibaba would form a subsidiary filled with cash and an asset of Yahoo!'s choosing, and Yahoo! would gain a position in the new, smaller Alibaba unit.
However, Loeb thinks Yahoo! should stay put. Last year, Alibaba offered to buy back Yahoo!'s position in a deal that valued Alibaba at about $24 billion. More recently, Alibaba performed an equity raise with a group of private investors which valued the company at $35 billion.
Looking ahead, the WSJ cites a UBS analyst who thinks Alibaba could command at market value of $63 billion in about two years, though that assumption bakes-in stronger margins and profitability as well as an Initial Public Offering of Alibaba shares.
Still, Yahoo! hanging on to its Alibaba position would add about $2 per year of value to the stock...which isn't bad considering Yahoo!'s current price of $15 per share.
But, just months after current CEO Scott Thompson took the reins at Yahoo!, talks to exit the Alibaba stake dissolved, meaning Thompson and Loeb might be on the same page.
Yahoo! is down about 0.6 percent on the session to about $14.50 in afternoon trading Monday.
Reported earlier, the WSJ cites Loeb's desire to keep Yahoo!'s stake in Alibaba, the largest e-Commerce company in China. In a letter to his investors, Loeb cites studies showing China's e-Commerce market may overtake that of the U.S. by 2015, with Alibaba leading the charge.
Currently, Yahoo! holds a 40 percent stake in Alibaba. The two have been in talks recently of how Yahoo! might lower its stake to about 15 percent, with the most recent being a "cash-rich split-off" in which Alibaba would form a subsidiary filled with cash and an asset of Yahoo!'s choosing, and Yahoo! would gain a position in the new, smaller Alibaba unit.
However, Loeb thinks Yahoo! should stay put. Last year, Alibaba offered to buy back Yahoo!'s position in a deal that valued Alibaba at about $24 billion. More recently, Alibaba performed an equity raise with a group of private investors which valued the company at $35 billion.
Looking ahead, the WSJ cites a UBS analyst who thinks Alibaba could command at market value of $63 billion in about two years, though that assumption bakes-in stronger margins and profitability as well as an Initial Public Offering of Alibaba shares.
Still, Yahoo! hanging on to its Alibaba position would add about $2 per year of value to the stock...which isn't bad considering Yahoo!'s current price of $15 per share.
But, just months after current CEO Scott Thompson took the reins at Yahoo!, talks to exit the Alibaba stake dissolved, meaning Thompson and Loeb might be on the same page.
Yahoo! is down about 0.6 percent on the session to about $14.50 in afternoon trading Monday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- UBS Upgrades Rivian Automotive Inc (RIVN) to Neutral, 'More balanced at current levels'
- Edgio (EGIO) mentioned as Positive at Citron Research
Create E-mail Alert Related Categories
Hedge Funds, Insiders' BlogRelated Entities
Daniel Loeb, UBS, Third Point LLC, Hedge FundsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
