This will be very interesting merger. I guess they have to spin off the Asian assets later on.
MM and Maynard expertise is how to expertly shower new board members. Did we hear any words from Mr. Smith yet? Where is feisty Mr. Smith then?
I think Softbank added to the deal yesterday $5.5B debt securities in exchanged for BABA stock in three years.
That is one day negative impact but the bottom line it is very good to YHOO and to BABA going forward. This deal put BABA to buyback their shares worth about $2.4B, so for YHOO it increases the valuation of their 15% stakes in BABA.
Big reason why BABA went down big time today due to discounted selling price of $74 per BABA share. There was additional $1B worth of shares sold also at $74 by Softbank to a sovereign wealth fund from Singapore. Softbank total shares sold worth at $8.9B.
Shorts massive short trades combined with less buying put tremendous pressure to the downside today. I expect BABA and YHOO to go higher tomorrow
This softbank deal is really very positive to BABA even for YHOO going forward. Basically BABA bought back $2.4B worth of their shares and the rest basically transferred ownership from Softbank to institutional investors $5B and $500M to a wealth fund. This is a clear cut deal transfer of ownership from various entities.
Plus $500M sale to the 19 founders including Jack Ma. This deal is really very positive to BABA and YHOO as well due to BABA and the founders of BABA buying back $2.5B worth of shares. Shorts just created a negative market noise about this deal where in fact this deal is very, very positive to BABA and YHOO shareholders.
So from 32% to 28% worth about $7.9B fully coordinated sale transaction between Mr. Son and Jack Ma so I didn’t see any surprise for this deal. I think the deal breakdown is as follows:
--$2B sale goes to Alibaba itself
--$5B sale to institutional investors
--$500M sale to sovereign wealth fund
--$400M sale to members of the partnership of BABA including Jack Ma itself.
So I see this deal as primarily transfer of ownership from Softbank to various entities.
This is just transfer of ownership and money worth about $8B between BABA and Softbank with various of other players involved.
Or another possible scenario is that Softbank will buy back YHOO 35% stakes in YJ, considered about $8B valuation, thus putting Softbank majority control of YJ. I don't think YHOO will take more BABA shares in exchange of their stakes in YJ my opinion.
This is a noise but the impact to YHOO is really nothing, but just noise period. This is simply a specific transaction between BABA and Softbank, plain and simple reduced percentage ownership of Softbank of their stakes in BABA and to various ownership to PE's, to some members of the higher management of BABA and probably some Hedge Fund groups and other groups.
This is a good push for YHOO to go over $40's range. With looming decision this week or next week of the bidder selected and BABA joining the MSCI, this will the give the strong push upside and shares up momentum for YHOO shares.
Gilbert and Buffett team will definitely the X factor in the bidding. But my take is that TFG and partner gave the highest bid so far.