Where Could Yahoo! Inc. (YHOO) Put Its Cash from Alibaba IPO


Yahoo! Inc. (NASDAQ:YHOO)‘s long wait for Alibaba IPO could come to an end later in the month according to CNN Money Digital Correspondent Paul La Monica. The cash-in on the giant Chinese e-commerce company, Alibaba, will allow Yahoo to recoup around $10 billion on the sale of 40% of its stake.

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 The biggest question at the moment is what the ailing search engine company will do with the huge cash balance. La Monica said that Yahoo! Inc. (NASDAQ:YHOO) needs the money as its CEO, Marissa Mayer, continues to soldier on with her turnaround strategy.

“[…] Some people think more acquisitions. Mayer obviously having done many of them in her short tenure as CEO also some people speculating may be Yahoo does a share buyback, possibly a dividend, those type of thinks investors usually love,” said Mr. La Monica.

 Mayer is reported to had told investors that part of the money generated from the IPO will be shared with shareholders in the form of stock buyback of or dividends. Since Mayer rose to the helm, Yahoo! Inc. (NASDAQ:YHOO) has completed a number of acquisitions including Tumblr and Summly.

 Competition has been a major headwind for the search engine company, having faced immense pressure from Google Inc. (NASDAQ:GOOG) on the online platform.

“Yahoo! Inc. (NASDAQ:YHOO) is still a company that has been unable to really compete against its rivals Google in search for example […] And then on the so-called display side, there is a type of video ads, and other non-tech space ads, you’ve got Google Inc. (NASDAQ:GOOG)  again with YouTube, and also Facebook Inc. (NASDAQ:FB) is a huge presence in this market […],” said Mr. La Monica.

Yahoo! Inc. (NASDAQ:YHOO) has been making a push for the mobile space as well as social and video platforms in anticipation that it will enjoy success in the long run. Mayer has already emphasized that investors will have to wait a little bit longer if they are to enjoy the benefits of her turnaround strategy.

D. E. Shaw increased his stake in Yahoo! Inc. (NASDAQ:YHOO) by 48% to 16.19 million shares during the second quarter of 2014.

Disclosure: none

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