Topeka Capital Markets‘s Victor Anthony, who has a Buy rating on Yahoo! shares, and a $49 price target, writes “A U.S. based listing would still be a positive for Yahoo! because investors who only invest in U.S. based companies, or who would rather not do the required work needed to directly own a Chinese domiciled company, can participate in Alibaba’s upside by buying Yahoo!”
Anthony urges investors to buy for the cash out of part of Yahoo!’s stake assuming such an offering:
We see Yahoo! netting $9.3B in after-tax proceeds from the initial share sale at the IPO based on a $150B valuation for Alibaba. Subsequently, we see Yahoo!’s remaining after-tax stake valued at near $20B. We believe Yahoo! uses the proceeds for share repurchases. There is potentially further valuation upside tied to the performance of Yahoo Japan.
Alibaba is “95 per cent certain” to choose New York over Hong Kong for its initial public offering, expected to be one of the largest in history, according to people close to the process.
The company is no longer “even engaged” with the Hong Kong exchange, according to one person familiar with the matter, while another said a New York listing was now “95 per cent certain”. A third person familiar with the situation said: “I can categorically tell you that Alibaba will not list in Hong Kong.”
Some of Yahoo's Mobile applications are more popular than Twitter and Instagram in the United States.
When compared to other web properties, Yahoo's core business is undervalued and has just as much upside.
Yahoo's display business is starting to recover, and compatible strategies for mobile monetization are starting to emerge.
I'm going to stand by my $75 price target for 2014, as I believe investors have undervalued Yahoo's! core web properties. Yahoo's! future proceeds from Alibaba's IPO is added whip-cream that goes on top.
SAN FRANCISCO, March 4 (Reuters) - Yahoo Inc will stop letting consumers access its various online services, including Fantasy Sports and photo-sharing site Flickr, by signing-in with their Facebook Inc or Google Inc credentials.
The change, which will be rolled out gradually according to a Yahoo spokeswoman, will require users to register for a Yahoo ID in order to use any of the Internet portal's services.
In eliminating the Facebook and Google sign-in features, Mayer, a former Google executive, is effectively reversing a strategy that Yahoo adopted in 2010 and 2011 under then CEO Carol Bartz.
The sign-in buttons for Facebook and Google will eventually be removed from all Yahoo properties.
Bank of America noted Yahoo! could trade up to $45 after the firm predicted that Alibaba, a Chinese e-commerce company in which Yahoo! owns a 24% stake, could launch an IPO within the next two months.
Yahoo has long talked a big talk about making a bigger, better footprint in the mobile advertising game. Now, with Gemini, a tool the company just launched that combines native search and mobile ads, it just might be able to walk the walk -- or at least make a move on Twitter and Facebook’s fat slice of the mobile pie.
Gemini, which Yahoo yesterday announced on Tumblr, is a self-serve all-in-one solution for native advertising and mobile search. The Sunnyvale, Calif.-based Internet giant is calling the “unified marketplace” tool the first of its kind to tie the two ad styles together. (Like twins? Presumably that’s how they came up with the name Gemini.)
“With Yahoo Gemini, advertisers get the performance and ease of search, combined with the scale and creativity of native advertising,” said Jay Rossiter, senior vice president of Yahoo’s cloud platform group, and Adam Cahan, senior vice president of the company’s mobile and emerging products division, in the announcement. “By bringing the two together, advertisers can now buy, manage and optimize their mobile search and native ad spend in one place — driving greater performance and higher impact for their businesses and brands.”
Advertisers can access Gemini from the Yahoo Ad Manager, the self-service ad-buying platform that CEO Marissa Mayer introduced in her CES keynote speech on Jan. 7, earlier this year. Previously, advertisers would have had to manage Yahoo’s mobile search ads using the Bing Ads platform.
Alibaba’s purchase of AutoNavi is a land grab, in two senses.
The Chinese e-commerce group has offered a premium price to buy the 72 percent of AutoNavi, a mapping company listed in the United States, it doesn’t already own, valuing the whole thing at $1.6 billion. There’s a compelling competitive reason for Alibaba to get deeper into online maps.
Buying AutoNavi plugs into the growing mania for O2O commerce – online-to-offline. The theory is that consumers will increasingly use smartphones to point them to nearby services and shops, or even preorder from restaurants online, all of which benefit from detailed mapping. In Alibaba’s case, there’s also an opportunity to weave in its fast-growing payment and financial service, Alipay.
Alibaba is paying for AutoNavi in cash, and the additional $1.2 billion payment is small for a company that is likely to command a market capitalization of more than 100 times that if a long-awaited listing takes place in 2014 or early 2015.
Yahoo owns 24% of Alibaba.
YahooYHOO +2.73% is partnering with Yelp as it tries to compete in Web search.
The deal is part of Chief Executive Marissa Mayer’s attempt to build a better search engine by surfacing content from variety of partners. In addition to the search results it gets from Microsoft's Bing, Yahoo will soon begin showing Yelp’s business listings and reviews when users search for restaurants or other local attractions.
At a conference last year, Marissa Mayer compared Yahoo’s search strategy to a winemaker who buys grapes from a vineyard: “You can grow your own grapes or buy them from someone else and still make a wine with your own style,” she said. Read more about the Yelp partnership here.
A Yahoo spokeswoman declined to comment on a deal with Yelp.
Citigroup views the 5% pullback in shares of Yahoo since the company's Q4 earnings report as a buying opportunity. Citi believes downside from current shares levels is limited and sees potential upside to the mid-$40s or higher on improved confidence in Yahoo's growth, a turnaround in the core business, and accretion from share buybacks. Citi reiterates a Buy rating on Yahoo with a $46 price target.
Alibaba, whose estimated valuation has reached US$153 billion, has no plans to seek a backdoor listing and has yet to decide when and where to list.
That is according to comments in Hong Kong from vice president of finance, Ren Bingzheng.
The mainland e-commerce giant sparked speculation of a backdoor listing after it joined Yunfeng Capital - a fund set up by Alibaba Group founder- chairman Jack Ma Yun - to buy a HK$1.33 billion controlling stake in information and content service provider CITIC 21CN (0241) on January 23.
Marissa Mayer has launched two projects - codenamed Fast Break and Curveball - aimed at creating proprietary search and search ad technology, and that the efforts are "part of a contemplation of how Yahoo can accelerate the end or even end its long-term search and advertising partnership with Microsoft ."
The effort is said to involve top Yahoo execs, including three product SVPs, and to feature just a 3-4 month time frame. Over time, it could "result in a full search engine, possibly more oriented to mobile than the desktop."
Marissa Mayer has voiced displeasure with the performance of the Microsoft deal, under which Yahoo's results and search ad platform are powered by Bing, and has reportedly considered abandoning it before.
Mayer’s inability to negotiate an end to the agreement means Yahoo will probably be bound to Microsoft until 2015, when either side may choose to terminate the deal.
Investors should snap up shares of Yahoo “on any weakness,” advises Jordan E. Rohan, analyst at investment firm Stifel, as he expects Yahoo’s April earnings “will highlight Alibaba’s seasonally strong fourth quarter numbers.” He has reiterated his buy rating on Yahoo and price target of $49 a share, based on his sum-of-the-parts analysis. The estimated valuation, he says, is largely dependent on the pace of share repurchases and valuation of Yahoo’s stakes in Alibaba and Yahoo Japan.
S&P Capital IQ upgraded Yahoo to a buy from a hold rating, raising its stock price target to $45 a share from $36. “After the stock’s 7%-8% decline, we now see Yahoo as attractively valued,” says S&P Capital IQ analyst Scott Kessler.
“Our increased price target reflects what we see as significant value associated with minority stakes in China’s Alibaba Group and Yahoo Japan,” he adds. Additionally, Kessler believes Yahoo’s “newer offerings and monetization efforts coupled with an increased focus on mobile would help stabilize fundamentals.”
Kessler argues that there’s “notable value in the stock,” helped by Yahoo’s “strong and flexible balance sheet.” Part of Yahoo’s treasured assets are its 24%stake in privately held Chinese Internet conglomerate Alibaba and its 35% interest in Yahoo Japan.
Beyond anything else, we know Apple is brilliant at monetizing everything it touches, something Yahoo! and Microsoft can't currently claim. Google's gift to provide relevant search results is only half their success story. The other half of its success is so simple that it makes my head hurt when I contemplate why Yahoo! and Microsoft's Bing never implemented it.
The other half is how easy it is to buy ads in the Google network. Small businesses, the ones that are willing to pay the most for any given unit of ads, are all but unwelcomed by others, except for Google. An Apple-controlled Yahoo! would likely create a world-class search experience, and make it easier than Google does to buy ads faster than Ballmer can say, "Damn, I knew we should have bid $40."
Yahoo! email, games, finance, and other segments may allow Apple to bring massive amounts of new people into the iSystem from around the world. If executed correctly, users will have less reason to migrate to Android and Apple can use the Web traffic from iDevices to increase the per-user revenue generated that is currently lost.
Of course, a merger the size of Apple and Yahoo! will have its speed bumps, albeit this is an option that has an attractive ROI payoff, increases revenue and profit and could improve both their respective positions against Google and Microsoft.
There are reports that Alibaba may stop its IPO until the end of 2014 despite previously being expected to commence in January of 2014. Implications of this decision could go both ways but I think, in fact I am quite certain that this delay will further boost the value of the company because there would be a few more quarters to impress investors and analysts, plus it may further strengthen the balance sheet.
Moreover, many analysts have actually raised the value of the Chinese internet giant. Some are anticipating its market value may reach $150 to $200 million by the end of 2014. If this materializes, it would be a game changer for Softbank and Yahoo's shareholders who currently own 35% and 24% stakes in the company, respectively.
Blackstone Equity Research-
Yahoo! Inc. will discuss the company’s financial results for the fourth quarter and full year ended December 31, 2013 via live stream video.
Yahoo! (YHOO) is one of the least understood investment opportunities in the technology space. Yahoo's! future earnings are heavily dependent on a multitude of variables. I factored in the impact from Alibaba, Yahoo! Japan, currency hedges, and growth in core operations into the future price of Yahoo! stock. I have concluded that the investment case for owning Yahoo! is solid, and I have been able to identify this throughout the course of this article. When you finish reading this article, I'm fairly convinced that you'll agree with me.
Over the short-term, I expect the stock to reach $93 to $168 per share in 2014. Assuming a midpoint of the two values and the stock will trade at $130.50 per share. This implies that investors have 226% upside from current levels. This price level is dependent on whether or not Alibaba reaches a market capitalization of $200 billion over the next five years.
I estimate Yahoo! will trade at approximately $191 to $354 per share by 2018. After calculating a midpoint of $272 per share, Yahoo's! market capitalization will be $272 billion in 2018. Based on my forecast, investors will net a 580% return over the next five years.
Yahoo! still owns some of the most heavily-trafficked Web sites on the Internet. The firm originated the ad-supported e-mail model, and by offering valuable sticky Web services, it still enjoys a base of more than 750 million users. While CEO Marissa Mayer hasn't turned the $40 billion ship around just yet, revitalizations take time -- especially when they're as overdue as Yahoo!'s is. But it's the firm's present-day fundamental performance that should get investors excited.
As I write, Yahoo! carries around 16% of its market capitalization in cold hard cash. And it generates margins in excess of 26% each quarter. In short, Yahoo has a lot of dry powder and it's able to generate a lot more. While management has been spending at a breakneck pace to acquire attractive new assets, the shopping spree should slow with ample shareholder value intact in 2014.
Bottom line: Yahoo! is a far more functional company than most investors give it credit for.
Stifel Nicolaus raised its price target for Yahoo to $49 from $40, saying the eventual distribution of Alibaba shares to stockholders could add up to $10 to Yahoo's stock price.