Investors gobbled up Yahoo Inc. YHOO +2.47% 's offering of convertible notes Wednesday, a sign of the strong demand for U.S. equities.
Yahoo increased the planned five-year convertible note offering from $1 billion to $1.25 billion, according to the company. Investors agreed to receive no income from the hybrid instruments in exchange for the right to get Yahoo shares or cash if the stock price jumps 50%.
The deal is the largest so-called zero-coupon convertible note offering by a tech company in the U.S. since Microsoft Corp.'s MSFT +0.84% $1.25 billion sale in 2010, a person familiar with the sale said. It is also the second such deal this month, after software company ServiceNow Inc. NOW +1.60% sold $575 million, the person said.
Yahoo Screen is coming to Apple TV, the company announced on its Tumblr. Included in the content are "Saturday Night Live, The Colbert Report, The Daily Show with Jon Stewart, live news and events, music and original Yahoo programs," the company said in the blog post.
You'll also be able to browse trending videos and watch Yahoo Originals programming, which are delivered direct to your Apple TV.
Alibaba is valued at $120 billion according to the average estimate of six analysts in October. Carlos Kirjner at Sanford C. Bernstein lapped the field by doubling his valuation to $190 billion.
He based the figure on a projection that Alibaba’s net income will climb from $2.6 billion this year to $6.1 billion in 2015, as revenue rises from $6.6 billion to $13.5 billion. A market value of 30 times 2015 profit is in line with Tencent, he said.
SAC bought 6.7 million shares of Sunnyvale, California-based Yahoo and owned 7.6 million shares valued at $251 million as of Sept. 30, making it his largest equity investment, according to a filing today with the U.S. Securities and Exchange Commission.
Tiger purchased 8 million shares in Sunnyvale, California-based Yahoo valued at $265 million at the end of the third quarter, according to a filing today with the U.S. Securities and Exchange Commission.
Retailers in the U.S. wait all year to make up for sluggish profits through the perfect storm referred to as Black Friday, which is a combination of the buying frenzy of Thanksgiving and Christmas and New Years day packed in one day. However, according to the Xinhua/Zuma Press, Alibaba's logistics center, located in Guangzhou, is currently preparing for a sales volume on Monday, November 11th that will dwarf what retailers make in the U.S. on Black Friday.
So far today, Alibaba has $3.1 billion in sales and the day is only half over.
The apparent thawing in the relationship between Yahoo and Alibaba has everything to do with Marissa Mayer, who took over as CEO of Yahoo more than a year ago.
Signs that relations were improving between the pair showed up as early as last December, when Alibaba announced the appointment to its board a Yahoo executive. That appointment represented an early sign of a thawing in the frosty relations between the 2 companies.
Yahoo now says it will sell 208 million of the 523.6 million Alibaba shares it now holds when Alibaba makes its highly anticipated IPO. That figure is about 20 percent less than the 261.5 million Alibaba shares that Yahoo originally said it would sell at the time of Alibaba's IPO.
This could lead to an alliance, which could even see Alibaba acquire its own strategic stake in Yahoo at some point in the not-too-distant future.
Stifel Nicolaus‘s Jordan Rohan, who rates Yahoo a Buy, sees a $41 valuation for the shares assuming a worst-case scenario in which Yahoo's stake in Alibaba is fully taxed, along with the Yahoo’s stake in Yahoo! Japan.
However, Rohan sees three scenarios for what may happen to both stakes since management said it was thinking about how to do such a tax-efficient spin. One scenario is a so-called cash rich split, though he believes it’s unlikely “due to the magnitude of the gains that Yahoo may be trying to shield.” A stock dividend “makes sense financially,” providing Alibaba lists its shares in the U.S., not in China. And Thirdly, a “spin” of both Alibaba and Yahoo! Japan is the most interesting prospect:
This is the most intriguing of the scenarios, in our view. It achieves tax efficiency and, simultaneously, enables Yahoo’s domestic and international businesses/stakes to be buyable for private equity and strategic buyers. There are still some challenges here, but the upside could be quite compelling.
A tax-efficient divestment of both stakes would add $11 to Rohan’s $41 target, he writes.
Chinese e-commerce company Alibaba Group Holding Ltd has decided not to list on the Hong Kong stock exchange, Chief Executive Jonathan Lu told Reuters on Thursday.
B. Riley analyst Sameet Sinha today reiterated his Buy rating and $39 price target on the stock, writing that at this point, the Street’s estimates are sufficiently conservative, so the company should see an in-line quarter, which he thinks will be the trough in terms of year-over-year revenue decline and margin compression.
Sinha, like other analysts, note that investors will mostly be looking past the quarterly numbers to get a glimpse at Yahoo’s metrics for ecommerce giant Alibaba, which it owns a 24% stake in. Sinha has increased his valuation for Alibaba to $118 billion from $101 billion, based on higher estimates and a multiple of 20 on 2014 operating income.
Stifel Nicolaus‘s Jordan Rohan, who reiterates a Buy rating, and raises his price target to $41 from $33. Rohan raised his valuation assumptions for the first two tranches of stock that Yahoo! may sell when it starts to unwind its investment in Alibaba Group Holding, the Chinese e-commerce giant that is expected to go public sometime this year or next. Writes Rohan, “The value of Alibaba may exceed our prior $90bn/$120bn EV estimate (pre-tax). We now believe $120bn/$150bn is more accurate.” He expects the customary update on Alibaba’s financial results when Yahoo! reports Q3 results next Tuesday, October 15th.
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.
Citigroup raised its price target on Yahoo from $31 to $39. Analyst Mark May wrote in a note to clients that he credited his increased valuation of Alibaba, in which Yahoo holds an ownership stake, along with ”raising our valuation for core Yahoo! based on recent strong user growth and search trends” plus higher valuation multiples for the peer group.
Did you miss this part of my short post? Rather, what Microsoft needs to become relevant in the consumer space again are Marissa Mayer AND Yahoo!
Alan Mulally has an outstanding track record from Ford Motor and Boeing, but most likely wouldn't be the right guy to lead Microsoft to success.
Rather, what Microsoft needs to become relevant in the consumer space again are Marissa Mayer and Yahoo!
Not only is Marissa Mayer the right person to re-invent Microsoft, but Yahoo! is as important for Microsoft's competitive matrix as it was when it bid for the company last time.
Yahoo's 35% of Yahoo! Japan is worth $11.3 billion
Yahoo's core is valued at $15 billion
Alibaba at IPO is valued at $155 Billion when compared to LinkedIn and Facebook
Yahoo's 24% of Alibaba is valued at $37.2 Billion
Yahoo has $3 Billion in cash
Yahoo's value before taxes is $66.5 Billion or approx. $66/share!
Correction: Citigroup‘s Mark May reiterates a Buy rating, and raises his price target to $39 from $31.
comScore estimates Yahoo saw 22% Y/Y search paid click growth in August. Yahoo, whose search revenue per query has long trailed Google's, saw 21% paid click growth in Q2, partly offset by an 8% drop in cost per click.
Bank of America increased its price target on shares of Yahoo! to $38 as the upcoming Alibaba IPO well allow the company to unlock more shareholder value. Shares of Yahoo! were also lower with the general markets today, falling 0.4%.
Yahoo Inc joined Japan's SoftBank Corp on Friday in backing Alibaba Group Holding Ltd's planned partnership structure.
The U.S. Internet company, Alibaba's second-largest shareholder with a 24 percent stake, said it's important for technology companies to be able to preserve their culture and strategy.
"As one of Alibaba's largest shareholders, Yahoo believes that management's efforts reflect the desire to govern the company for long-term success while also balancing the rights of shareholders," Jacqueline Reses, chief development officer of Yahoo and a member of Alibaba's board of directors, said in a statement.