Yahoo! and the Effect of Alibaba’s IPO Getting Delayed

Yahoo! Inc. (NASDAQ:YHOO)’s stock price have taken a hit due to the pause by Alibaba to launch an IPO. Alibaba has been delaying this and the company has its own reasons, but this for sure is hurting Yahoo! Inc. (NASDAQ:YHOO)’s chances to boost its revenue.

Yahoo! Inc. (NASDAQ:YHOO)

CNBC’s Jim Cramer was discussing this on the “Mad Dash” yesterday and the discussion focused on what might be delaying the IPO and how it might hurt Yahoo! Inc. (NASDAQ:YHOO)’s share value. Yahoo owns 23% in Alibaba and if the Chinese e-commerce company delays its IPO, there would be very less left with Yahoo! Inc. (NASDAQ:YHOO) other than Alibaba.

Alibaba slowing the IPO doesn’t just impact Yahoo! Inc. (NASDAQ:YHOO), it might also impact JD. Alibaba looks like the only lifter for Yahoo! Inc. (NASDAQ:YHOO) and Cramer stated:

“How much has Marissa Mayer done? Because a lot of people just say listen Yahoo’s a shell, except for Alibaba.”

So, according to Cramer, the money raised from the IPO is a key measurement of where Yahoo! Inc. (NASDAQ:YHOO) is and if it doesn’t raise much money, there won’t be much left for it.

Alibaba’s net income growth last year was 305% and full year fiscal growth amounted to 52%. The net revenue growth was a little lower in the first quarter, in comparison with the last quarter of the year, mainly due to the money they spent on marketing. Cramer ended the conversation stating that the valuations of Alibaba by some industry analysts, estimating its value at $250 billion have been optimistic. However, he said even if Alibaba’s valuation is $200 billion, people would still buy Yahoo! Inc. (NASDAQ:YHOO).

Jat Capital Management owns about 7.6 million shares in Yahoo! Inc. (NASDAQ:YHOO) as of the end of March, while other key investors are Farallon Capital with approximately 5.7 million shares and Cadian Capital with around 4 million shares.

Things have been changing rather rapidly for Yahoo! Inc. (NASDAQ:YHOO) and if the IPO doesn’t get launched soon, there might be bigger problems to face.

Disclosure: None

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Most Expensive Day-Care in New York City

The 10 Cheapest Places to Retire Abroad

Top 10 Most Expensive Luxury Cars in the World – 2014

Killer Small Business Ideas

The 50 Best Personal Finance Blogs

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!