Categories
Stocks

Valuation of Yahoo’s Alibaba stake

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Yahoo buys US$1 billion stake in Alibaba (2005-8-11, China Daily): $1 billion for 40% stake of Alibaba Group (parent company of Alibaba, Taobao and Alipay). Taotao and Alipay is Chinese equivalent of eBay and Paypal, repectively.

Yahoo sells direct stake in Alibaba.com (cnet, 2009-9-14). Quote:
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Yahoo has sold 1 percent of its stake in the Chinese-based business-to-business trading site Alibaba.com, the company said on Monday. Reuters first reported on the story.

In November 2007, Yahoo invested approximately $100 million in Alibaba.com when it went public on the Hong Kong Exchange. Writing in an e-mail, a company representative said that Yahoo’s “sale of its shares in Alibaba.com is expected to generate pre-tax proceeds of approximately $150 million.”
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According to Yahoo, it maintains approximately 40 percent interest in the Alibaba Group. “Alibaba Group owns approximately 70 percent of Alibaba.com,” Yahoo wrote in the e-mail, “and as such, Yahoo continues to own an approximately 28 percent indirect interest in Alibaba.com.”
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1% of Alibaba.com (1688.HK) = $150 m
28% of Alibaba.com = $150 m * 28 = $4,200 m = $4.2 billion

Categories
China IPO

Alibaba update

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It was a short while ago (last Nov) Alibaba did its high profile IPO in Hongkong. Now it’s back in the news again. Don’t get me wrong, Jack Ma (Ma Yun), the founder and Chairman of Ali, was always in the news. I remember a few years ago (when the company was private) he said Ali pays 1 millions Yuan everyday, that’s not a small number and people thought Mr. Ma was bragging. Oh, well, bragging or not. Alibaba’s IPO was very successful, and it created a few hundred millionares (stock option holders) in its employee bases, from what I read last Oct.

Fast forward to March 2008. It reported a good quarter but stock continued to drop (see Sramana Mitra at Seekingalpha). And there is a rumor about class action lawsuit coming (news in Chinese).

Alibaba 1688 stock chart
(Alibaba 1688.HK 6 month stock chart, full size pic here).