Shares of Yahoo! today rose 25 cents, or 1%, to close at $26.64, after receiving a couple of price target increases from the Street.
Both notes seem prompted in large part by the release last week of the company’s 10-Q filing for Q1, in which Yahoo! disclosed some additional information about the financial results for the December quarter of Alibaba Group Holding, the e-commerce giant in which Yahoo! holds a 24% equity stake. Those disclosures last week prompted some price target increases as well. Yahoo! stands to profit from the expected eventual initial public offering of Alibaba, and so its valuation is a constant source of interest to the Street.
I am betting now the IPO market valuation for Alibaba Group will be $70B. Previous news reports are betting between $60B to $100B. GS, being one of the IPO advisors, I think the IPO will be at $70B, a moderately conservative valuation. GS will be playing this IPO safely learning big time from FB IPO flop. I think valuing Alibaba at conservative valuation will give Wall Street traders and main street investors to get excited on Alibaba first day of trading. Good luck Alibaba!!
Sentiment: Strong Buy