Yahoo will be selling 9.54% of Alibaba which using the above valuation of Alibaba will generate $14.89B before tax. The company is obviously going to make this transaction as tax efficient as possible but is likely to have to pay close to the US Corporate Tax rate. Therefore using a Tax Rate of 35%, the share sale will generate $9.682B after tax. The value of its remaining holding in Alibaba will be $22.5B.
The company has recently valued its stake in Yahoo Japan at $11.406B and has Net Assets of around $4.4B. The underlying business generates $180M in free cash flow (Net Profit After Tax of 99M plus Stock Based Compensation $81M). Even using a very conservative multiple of 8 which would be applicable to a mature low growth stock, this yields a valuation of $1.437B. In total the company post IPO will be worth around $48B which implies a stock price of $47.47.
Yahoo price target raised to $46 from $39 at Citigroup
Citigroup raised its price target for Yahoo shares to $46 citing its sum-of-the-parts analysis and keeps a Buy rating on the stock. Citi now values Yahoo's stake in Alibaba at $24 per share, its core business at $15 per share, and its stake in Yahoo Japan at $6 per share.
Yahoo (YHOO) and NBC (CMCSA) announce that they have extended their Olympics coverage alliance to the 2014 Winter Olympics.
The deal for an undisclosed amount will see Yahoo receive digital video rights to NBC's coverage, including live streams of select events.
The Winter Games in Sochi, Russia will run from February 7 to February 23.
RBC Capital Markets‘s Mark Mahaney this afternoon reiterated an Outperform rating on shares of Yahoo!, and raised his price target to $44 from $38, writing that the value of the company’s stake in Alibaba Group Holding, the privately-owned e-commerce giant of China, has risen to $36 billion from what he had previously modeled as $26.4 billion.
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.