Yahoo! Inc. (YHOO) Steady Despite a Mixed Survey About Alibaba’s IPO


Yahoo! Inc. (NASDAQ:YHOO)’s stock price is on upside for over a week now and the Alibaba IPO seems to have lifted the value of Yahoo! Inc. (NASDAQ:YHOO). The share of the company went up from $33 mark to $36 in about a week’s time and looking good.

ConvergEx has recently conducted a survey on the IPO and the results were quite interesting. Nicholas Colas, the chief market strategist at ConvergEx Group, was on CNBC yesterday and he discussed the results of the survey. He said the results tell that there is a lot of optimism about the IPO. He said that the IPO is going to price well and will work in the first 30 days. The market structure is not going to affect the IPO by any means. Survey tells that there are longer term prospects for investors. This looks good from Yahoo! Inc. (NASDAQ:YHOO)’s perspective, doesn’t it?

“The real mechanics of the deal look excellent.” Colas said.

However there is a small catch here, while a lot of people who took the survey were optimistic about the pricing and sustainability, around 50% of the people said that they don’t plan to invest in the Alibaba IPO at all. 11% of the people said that they’ll buy Alibaba at the IPO. This is the first survey of ConvergEx and they don’t have a proven history of surveying similar IPOs. However Colas was positive about the survey response and he said that it was a very balanced survey with a lot of financial professionals participating.

“We had roughly 330 people respond, half from the straight up institutional buy side, no retail involved here.; the other half from brokers and other partners that we work with, all financial professionals.” Colas stated.

He agreed that it’s the first survey for his company; however he said that it is a huge transaction and if the IPO generates even the cash it’s expected to, it might be among the top 10 IPOs of all time. With all this said, because it is the first survey for ConvergEx, there is no way to compare it with the previous surveys the company has conducted and compare how much of it would actually become true.

“The breakdown was, if they already own Chinese equities, they’re pretty happy to buy, 2/3rds will. If they don’t, well less than half.” Colas mentioned.

So this tells that it comes to familiarity with Chinese equities that would drive the sales atleast we see it from this survey. We will have to see if this impacts Yahoo! Inc. (NASDAQ:YHOO).

Disclosure: None