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Yahoo! Inc. (YHOO) is Getting Nervous as Alibaba Goes Public

Yahoo! Inc. (NASDAQ:YHOO) has been a little under the weather in past couple of years, the company is facing severe competition in most of its core businesses. It’s faith will somehow indirectly be decided at Alibaba‘s, in which the former company has a 22% stake, Initial Public Offering (IPO). Credit Suisse Group AG (ADR ) (NYSE:CS) is going to head the deal, reported CNBC‘s Kayla Tausche. 1

To many, the bank to lead the IPO might not come as a big surprise because the group had built early ties with Alibaba. Credit Suisse Group AG (ADR) (NYSE:CS) might end up with a profit of $68 million if the e-commerce giant manages to achieve a valuation of $121 billion, which might be somehow conservative, since many predict that Alibaba’s IPO will be worth as much as $200 billion.

Speculations were brought forward previously that Yahoo! Inc. (NASDAQ:YHOO) might be interested in it being acquired by Alibaba. Nevertheless, the main question for now remains what Yahoo! Inc. (NASDAQ:YHOO) should do with the money it gets from Alibaba’s IPO, since it has to sell 40% of its stake. Some people claimed that after the bargain the search-engine company should use the $10 billion it can get to return shareholders money in form of dividends or buybacks. Possibly, things might take a turnover and this IPO will somehow relieve the tension and disperse the rumors.

As an interesting fact, it comes out that Alibaba is following an unusual strategy for its IPO by launching a ‘friends and family program’.

“[…] What this will be is basically an allocation of some of the shares offered in the deal that will go to employees, go to employees’ family members and to so-called friends of the founders and the senior management […],” said Kayla Tausche.

We cannot make any predictions regarding the amount that the company will be able to harvest with its IPO and certainly, Yahoo! Inc. (NASDAQ:YHOO) ‘s fate is quite uncertain, but its team must be somehow nervous and optimistic about the upcoming event, we’re talking about a possible $48 billion stake.

Disclosure: none

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