Yahoo! Inc. (YHOO)’s Trying To Minimize Its Dependency On Alibaba Group Holding Ltd (BABA)?


About a month ago, in an article on Forbes, Gene Marcial talked about Yahoo! Inc. (NASDAQ:YHOO) stock and made some predictions. He said that with the staggering Alibaba Group Holding Ltd (NYSE:BABA) IPO in the US, Yahoo went up and became a favorite choice for many investors. Yahoo! Inc. (NASDAQ:YHOO) owns 22.4% stake in Alibaba Group Holding Ltd (NYSE:BABA). But soon after the IPO launch, Yahoo! Inc. (NASDAQ:YHOO) started to tumble. The reason was the habit of Street to give surprises. Investors argued that upon getting heavy piles of cash from Alibaba Group Holding Ltd (NYSE:BABA) IPO, Yahoo will start an acquisition spree, which will deplete the value of the company. Marissa Mayer vociferously bashed these arguments and said that the company would return 50% of this cash in the shape of buy backs backs and dividends but these claims could not give a support for Yahoo! Inc. (NASDAQ:YHOO).

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 But Alibaba Group Holding Ltd (NYSE:BABA) IPO remains the imbibing factor for investors in Yahoo! Inc. (NASDAQ:YHOO). Soon after the launch of the impressive IPO from Alibaba Group Holding Ltd (NYSE:BABA), investors again started to value Yahoo a bit higher. The stock went up to $40 from $39. The source said that Starboard Value letter to Marissa Mayer about AOL’e merger with Yahoo! Inc. (NASDAQ:YHOO) was suited to the market value of the company. Marcial was bullish on Yahoo based on many vague arguments, but the recent stock price of Yahoo! Inc. (NASDAQ:YHOO), Alibaba Group Holding Ltd (NYSE:BABA)’s zero interest in acquiring Yahoo! Inc. (NASDAQ:YHOO) and no possibility of AOL’s merger with Yahoo has proved Marcial’s analysis wrong.

Although Yahoo stock touched new heights recently, but this is again linked to Alibaba Group Holding Ltd (NYSE:BABA)’s surge in the market. Yahoo! Inc. (NASDAQ:YHOO) has emphatically defended its new acquisitions and the company is hoping for a long term pay off from these ventures. Still, Yahoo! Inc. (NASDAQ:YHOO)’s core business is damaged and the company is earnestly looking for a genuine product or service that can tilt the market in its favor.

John Thaler‘s Jat Capital Management hold around 8.8 million Yahoo! Inc. (NASDAQ:YHOO) shares.

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