The anticipated Alibaba IPO has and continues to generate both heat and light in Yahoo! Inc. (NASDAQ:YHOO) as experts weigh in on the matter. As that happens, two positions, as always, are clear on the matter of Yahoo! and Alibaba, the Chinese e-commerce company that plans to launch in New York later this year.
In CNBC’s ‘Fast Money,’ Jon Najarian and Stephanie Link dissected Yahoo! Inc. (NASDAQ:YHOO)’s stock. While Jon Najarian made a bullish case for Yahoo! with regards to the potential cash windfall from Alibaba, Link made a strong bearish case on the stock, mostly citing lack of supportive fundamental in the company.
Alibaba has become an important decision matter in the case of Yahoo! Inc. (NASDAQ:YHOO) as an investment. While the company delivered a miserable 2Q results, CEO Marissa Mayer not only maintained that the company’s recovery is a multiple year project in which patience is needed, but she also told investors that they will share in the proceeds from Alibaba IPO. Yahoo owns nearly 23 percent stake in Alibaba that could translate into a cash windfall in the neighborhood of $10 billion. Mayer said shareholders would share at least half of the IPO proceeds.
The company is also expected to put some of the money into more acquisitions as it has done in the past to grow revenue through new products and enhanced user-engagement.
Coming onto the matter of bullish and bearish discussion of Yahoo! Inc. (NASDAQ:YHOO), Najarian articulated his bullish view on the stock by observing that returning 50 percent of the Alibaba benefits to the shareholders is an interesting development.
“I like the direction they’re going. The fact they’ve battered it down here, thinking about flipping this one into my playbook playoff. That’s how confident I am. It’s going up,” Najarian said.
However, Link made her bearish case of Yahoo! Inc. (NASDAQ:YHOO) stock saying that fundamentals don’t support the 90 percent gain in the stock over the past 18 months.
“They need growth in this quarter, nowhere to be found” she remarked. She thinks that Alibaba IPO will not be a game-changer for Yahoo! Inc. (NASDAQ:YHOO).