Fund managers are liquidating their positions in other major tech stocks, to buy into the Alibaba Group Holding Ltd (NYSE:BABA)’s IPO. While among the tech leaders Yahoo! Inc. (NASDAQ:YHOO) is the one having a direct connection with Alibaba Group Holding Ltd (NYSE:BABA), other stocks like Apple Inc. (NASDAQ:AAPL), Facebook Inc (NASDAQ:FB) are seeing downward pressure on their stock, which can be attributed to the upcoming Alibaba IPO. The market cap at which Yahoo! Inc. (NASDAQ:YHOO) is trading right now is nearly the sum of all of its investments; the market is discounting its core business in the valuation, which makes it an attractive buy. Jim Cramer feels that buying other major tech stock can be better than putting one’s money in the Alibaba Group Holding Ltd (NYSE:BABA)’s IPO. He discussed his views recently on CNBC.
“[…] the more aggressive buyers of Alibaba could take through the remainders of Yahoo’s voluminous stake they haven’t yet sold. They are selling some in the IPO and then send the rest of it to levels where the company’s core business actually valued at less than nothing. That’s ridiculous, at that price some private equity firm will just come and break the darn thing up […],” Cramer said.
Cramer feels that investors wouldn’t have been able to by Apple Inc. (NASDAQ:AAPL) at current levels as it is trading now, after the news of it registering pre-orders in excess of 4 million became public, if the Alibaba Group Holding Ltd (NYSE:BABA) IPO wasn’t around. He believes that the record sales of iPhones isn’t yet factored in the prices that Apple Inc. (NASDAQ:AAPL) is trading and the Apple Watch can have beyond expected sales, which makes Apple Inc. (NASDAQ:AAPL) a great buy at current levels. Cramer believes that the recent correction in Facebook Inc (NASDAQ:FB) stock makes it a good buy for investors as the company has a great business model.
As of June 30, 2014, D.E. Shaw’s firm D.E. Shaw owns over 16 million shares in Yahoo! Inc. (NASDAQ:YHOO), Philippe Laffont’s Coatue Management owns over 5.8 million shares in Facebook Inc (NASDAQ:FB), and Carl Icahn’s Icahn Capital LP owns over 52 million shares in Apple Inc. (NASDAQ:AAPL).