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Yahoo! Inc. (YHOO) Message Board

  • deanmortensen deanmortensen May 11, 2014 8:40 PM Flag

    Alibaba will be a "must own" stock for many institutional investors

    Many news reports and articles point out that 80% of e-commerce transactions in China are through Alibaba. Alibaba does more e-commerce transactions that Amazon and Ebay combined. And, the number of internet users in China is still growing rapidly, unlike in the U.S. Alibaba's revenues grew over 50% in 4Q. One could almost say that Alibaba is e-commerce in China. Alibaba is also making inroads into mobile e-commerce, as 20% of sales in 4Q were made on mobile devices, up from 7% in the year earlier quarter. I expect institutional demand for IPO shares to be very strong, because of Alibaba's dominant incumbent position in China e-commerce and its torrid growth that looks set to continue.

    I think the IPO will price at the upper end of the expected range based on voracious demand for the shares. The current market price of Yahoo! stock is not reflective of its sum-of-the-parts value, and I expect Yahoo!'s stock price to advance after a successful Alibaba IPO which is likely to be way oversubscribed.

    Sentiment: Strong Buy

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