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Yahoo seen unlikely to sell Alibaba stake after Yang
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Yahoo seen unlikely to sell Alibaba stake after Yang
Yahoo announced on Monday that Yang -- who drew investor wrath for rebuffing a takeover bid from Microsoft earlier this year -- would step down as chief executive as soon as a replacement is found.
"No matter who becomes the new CEO of Yahoo, I don`t think they would want to sell their investment in China," said Elinor Leung, an analyst at CLSA. "They`re having a tough time in the U.S., and China is the growth potential for them."
Other analysts expressed similar views, even as Alibaba has posted a spotty record since Yahoo paid $1 billion and injected other assets into the firm in 2005 for a 40 percent stake.
Yang, a native Taiwanese who co-founded Yahoo, was a strong supporter of the Alibaba deal, travelling frequently to China and making numerous appearances with Alibaba chief Jack Ma.
Alibaba put its profitable business-to-business marketplace website, Alibaba.com Ltd, into a separate company which it listed about a year ago in an IPO that raised $1.5 billion.
Since then, however, the listed company`s share price has tumbled 65 percent.
In addition, its online consumer auction and e-payments services, while popular, are both believed to be losing money.
Alibaba.com still has a market capitalisation of about $3.4 billion, meaning Yahoo`s 40 percent stake in the listed company would be worth $1.4 billion alone.
"China remains a fairly large market and it would be quite unlikely that they would want to pull out of there," said another analyst, who could not be quoted by name due to company policy.
"Alibaba is doing fairly all right and, from a development point of view, there should be no or very little impact on Alibaba`s future moves."
BOCI International analyst Xi Weidong said Alibaba would lose a special bond with Yang`s departure, but the next CEO would not necessarily want to sell Yahoo`s stake in the company.
"The personnel change will, to some extent, affect Yahoo`s stake holdings in Alibaba," he said.
"On the other hand, business value is crucial in decision making for the management. Facing a global economic slowdown, the demand for online transactions is growing in China, which will add to Alibaba`s value."
Source:
http://in.reuters.com/article/technologyNews/idINIndia-36564520081118
