Shares of Yahoo! Inc. (YHOO) and Sina Corp. (SINA) got a nice boost Monday morning from the weekend's reports that China's e-commerce behemoth Alibaba has filed for a U.S. initial public offering (IPO). Alibaba has not filed with the U.S. Securities and Exchange Commission (SEC) yet, but that filing could come as early as next month.
Alibaba is said to be seeking to raise at least $15 billion in the IPO at a valuation of around $120 billion for the entire company. Yahoo! owns a 24% stake in Alibaba, and Japan's Softbank, which recently acquired a controlling interest in Sprint Corp. (NYSE: S), owns a 37% stake.
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Alibaba has failed to convince the Hong Kong stock exchange to change its rules forbidding the company's partnership. Weibo, which filed for a U.S. IPO after markets closed on Friday, will adopt a dual-class share structure. In Alibaba's case, the company wants to maintain its current partnership structure which gives management complete control over naming members to the board of directors.
Yahoo!'s 24% stake in Alibaba would be worth as much as $37 billion according to Bloomberg News, and the company is under a contractual obligation to sell a substantial portion of its shares as soon as Alibaba goes public. And Yahoo! must sell at the IPO price.
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Alibaba also holds a 19% stake in Weibo, which is majority owned by Sina. Weibo, the Chinese answer to Twitter, is seeking $500 million in its IPO.
Sina shares were up about 7.7% in early afternoon trading Monday, at $69.51 in a 52-week range of $45.54 to $92.83.
Yahoo! shares were up about 4.2%, at $39.18 in a 52-week range of $21.87 to $41.72.