Alibaba’s Delay in IPO Impacts Yahoo! Inc. (YHOO)’s Stock Price


Yahoo! Inc. (NASDAQ:YHOO) has declared its Q2 results recently and it has missed the market estimates. Though the earnings at $0.37 look better than $0.35 in the same quarter last year, the revenue from Ads disappointed the investors. Alibaba’s IPO was the held the interest of investors in the stock, however it has decided to delay the IPO and this didn’t help Yahoo! Inc. (NASDAQ:YHOO)’s stock at all.

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David Faber of CNBC reported and he said that the management of Alibaba decided overnight to delay the IPO probably to Mid-September. The company was looking aggressive and was supposed to be going public by 8th of August at the latest. The company was relying on the quick response from the SEC, however the response and the follow up questions to Alibaba taking more time than expected. Yahoo! Inc. (NASDAQ:YHOO)’s stock lost over $2 after the results announcement. This delay is not helping their case either.

The company is going back and forth with the SEC and has currently done two turns with the SEC and it is expected that there may be more of those. The management noted this promptly and pushed back the IPO launch date. Alibaba would have needed to start the roadshow as soon as next week, if they had to target the 8th of August as a probable date to launch the IPO. Few investors started to think that the delay might be the due to the earnings of the company not being up to the expectation, however Faber said that it is because of the SEC discussion delay only.

“For surely this week, we heard Yahoo will be selling fewer shares, 208 million down to 140 million. No word yet on that whether that is going to be made up by Alibaba by selling more primary shares.” Faber said.

Disclosure: None