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Yahoo! Inc. (YHOO) Has a Winning Ticket but Doesn’t Know When the Lottery Will Be

So, we all are expecting it to happen and some of us already have an idea regarding the proceedings, but there’s little information about when it will take place. Alibaba is going for an Initial Public Offering (IPO), probably one of the greatest IPOs of all time and Charles Sizemore, CIO of Sizemore Capital Management, during an interview on CNBC expressed his views regarding the company’s stock. It might rise 20% to 30% right after the IPO. This move will benefit Yahoo! Inc. (NASDAQ:YHOO), which currently owns about 24% of the e-commerce firm. However, this boost might not be sustainable due to the high amounts at play.

Yahoo! Inc. (NASDAQ:YHOO)

“If you look at their offering price, it puts them roughly at a market cap of $165 billion, depending on what range of the estimate you’re looking at. That puts it bigger than Amazon.com, out of the gate, that is a very very large company […],” said Mr. Sizemore.

It is believed that Alibaba might repeat Facebook Inc (NASDAQ:FB)’s story, which saw the price spike sharply then fell afterwards. There might be a possibility in which the Chinese giant stretches out, plays right and manages to sustain a huge post IPO growth, but it will be difficult.

“[…] It’s a great company and there’s everything good about the company. I’m just questioning the valuation of the stock so I’m sitting on the sidelines and I am going to wait and see how the dust settles here […],” added Charles Sizemore.

If Alibaba manages to pump its value, Yahoo! Inc. (NASDAQ:YHOO) will further grow in price, which has been moving upwards from mid July. The date that the Sunnyvale, California-based company revealed its stake in the e-commerce giant, its stock got a 9% jump and continued to rise, currently it’s around $41. The news of the Alibaba’s IPO are already included in the stock prices of both companies leaving the greatest issue for the moment be the date of the deal.

Disclosure: none

 

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