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

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