Yahoo! Inc. (YHOO) Gets $10 Billion From Alibaba IPO

When Alibaba finally IPO, Yahoo! Inc. (NASDAQ:YHOO) will have a new breathe of life after languishing in diverse troubles. The other competitors such as Google, Netflix, and Amazon have literally made the market unbearable for Yahoo!

But with the Alibaba cash on the pipeline, Yahoo! Inc. (NASDAQ:YHOO) might just get back on its feet. Bloomberg mentioned in a detailed article that Yahoo! will be selling 140 million shares, down from the initially planned 208 million shares. According to experts the amount of money Yahoo will get from the IPO will be around $10 billion. With expectations very high and shares trading at healthy figures, Yahoo! has the potential of making an amount enough to keep it actively and progressively afloat in its highly competitive market.

Bloomberg has mentioned that Yahoo! will be returning at least half of its earnings from the Alibaba IPO to shareholders. This is good news for those who’ve kept their shares put at Yahoo! in spite of its troubles. Yahoo! CEO Marissa Mayer has been on a strategic drive to revive the company’s core business, a factor that has kept some of the investors around.

Yahoo! Inc. (YHOO)

The prospect of what’s considered the biggest IPO of all time has drawn mixed reactions from financial analysts and traders from across the globe. They have their own ideas of how Yahoo! Inc. (NASDAQ:YHOO) should spend its earnings from the debut market.

Below are some comments by experts as published on CNBC:

“Yahoo is actually better off just throwing in the towel,”

said New York University finance professor Aswath Damodaran, a valuation expert.

“The most sensible thing that they can do is give the money back to stockholders. They have lost the game to others (Google, Netflix, Amazon) and it is time for [CEO] Marissa Mayer to concede and not throw good money after bad,” Damodaran said in an email to CNBC.

Kinshuk Jerath, a Columbia Business School marketing professor and some other experts think that the best thing for Yahoo! Inc. (NASDAQ:YHOO) to do is invest more on content and mobile if it’s to regain its lost glory.

“Yahoo has all the chops to catch up to Google in terms of engineering and capitalize on their massive audience and monetize it through a smart, programmatic advertising infrastructure. Money would be well spent there to continue their growth,” said Will Doherty, senior director of business development for Casale Media. “But the riskier, much more lucrative bet, would be on original content and episodic shows.”

What Yahoo! will do with the cash is yet to be known, but the opinion of these experts are really worth looking into by the Yahoo! Team.

This article has been written by Victor Ochieng and edited by Serkan Unal
“CBS Corporation (CBS), Time Warner Cable Inc (TWC) and Yahoo! Inc. (YHOO): Jat Capital Management’s Top Holdings”

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