Yahoo! Inc. (YHOO) Banking on Alibaba IPO Success


The market is currently waiting in anticipation, the much publicized Alibaba IPO which many people expect to recoup up to $20 Billion in net proceeds. Yahoo! Inc. (NASDAQ:YHOO) is set to sell some of its stakes in Alibaba, during the IPO offering. Ironfire Capital’s Eric Jackson, in an interview on CNBC, has reiterated that the market is certain to be in high-gear over the coming weeks in anticipation of the IPO. There has been suggestions that the IPO could take place on August 8 of which Jackson believes could take place earlier than anticipated.

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“Most people think the IPO is going to happen on August 8th, it wouldn’t surprise me if a week from now we hear rumblings that the roadshow is starting.”

The period leading to the IPO, Alibaba will be able to shed more light on how it performed in the second quarter as well as other plans it intends to undertake for the remaining part of the year.

The analyst expects Alibaba to receive a bump after holding the IPO, due to many people wanting to get involved with the stock. “Once it goes public, there is a good chance, I think, this thing could see a bump afterwards not a GoPro type-of  bump, but I think there could be a lot of people demanding to get into this stock,” said Me Jackson.

The total amount to be raised during the IPO could mainly be made of Yahoo! Inc. (NASDAQ:YHOO) selling its stake back to Alibaba management. It is still unclear whether the IPO play will be in favor of Yahoo! Inc. (NASDAQ:YHOO) as the Search engine giant will still own some stakes in Alibaba having recouped a sizeable amount invested years back. There has been a fundamental disconnect in the industry over the past three years in terms of Yahoo! Inc. (NASDAQ:YHOO)’s core operations and valuation, awaiting to see the impact of the IPO on the company.

Despite performing dismally over the past few years, Jackson reiterated that the company cannot be rated as a zero performer especially when compared to AOL, Inc. (NYSE:AOL), which continues to enjoy reasonable valuation.

Disclosure: none