Third, not many investors have confidence that Yahoo will know how to
use its new billions. The company is returning only half of its initial
IPO sale to shareholders through special dividends and stock buybacks,
not specifying how the rest would be spent, according to Bloomberg.
Lastly, investors may just want to bypass Yahoo for now and wait to go right after its most valuable asset by buying stock in Alibaba.
“Once investors can buy Alibaba directly, and assuming there won’t be any arbitrage, that could limit demand for Yahoo,” Loria said. “People who want to buy Alibaba will just buy Alibaba.”
Lastly, investors may just want to bypass Yahoo for now and wait to go right after its most valuable asset by buying stock in Alibaba.
“Once investors can buy Alibaba directly, and assuming there won’t be any arbitrage, that could limit demand for Yahoo,” Loria said. “People who want to buy Alibaba will just buy Alibaba.”
Yahoo stock is still up 8.3 percent year-to-date,
and spiked 29 percent since July to hit a high of $42.8 on Monday. The
only other public holding company of Alibaba is Japanese
telecommunications firm Softbank (TYO:9984,) which has an even large
r
piece at 32 percent, but also has other valuable assets that should keep
shareholders interested.
Alibaba is expected to make its debut on Sept. 19 with ticker symbol BABA.
“Alibaba is the only good decision Yahoo has made in the past
several years, everything else has gone south for them,” Kinshuk Jerath,
professor at Columbia Business School, said to IBTimes.
“If you take out that chunk, not much is left,” Jerath said. “People have really lost faith in the company.”
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