Yahoo says to keep larger stake in Alibaba after its IPO

SAN FRANCISCO Wed Oct 16, 2013 8:33am IST

A worker walks past a logo of Alibaba Group at its headquarters on the outskirts of Hangzhou, Zhejiang province, August 24, 2013. REUTERS/China Daily/Files

A worker walks past a logo of Alibaba Group at its headquarters on the outskirts of Hangzhou, Zhejiang province, August 24, 2013.

Credit: Reuters/China Daily/Files

Related Topics

Stocks

   

SAN FRANCISCO (Reuters) - Yahoo Inc (YHOO.O) said on Tuesday it will keep a larger stake in Alibaba Group Holding Ltd than originally planned after it goes public, hoping to profit from the Chinese e-commerce company's future growth.

Founded by billionaire Jack Ma, Alibaba is expected to file for an estimated $15 billion IPO in 2014, valuing the operator of retail, auction and content websites at more than $100 billion. The IPO is one of the most eagerly anticipated Internet debuts since Facebook Inc (FB.O) in 2012.

Alibaba has decided not to list its shares in Hong Kong, but has not yet committed to listing on any other exchange, including the New York Stock Exchange, CEO Jonathan Lu told Reuters last week.

Under the terms of an amended agreement that Yahoo announced alongside its quarterly results, the U.S. Internet company will sell up to 208 million of the 523.6 million Alibaba shares it owns, either directly to the Chinese company or through the IPO. That is down from a previously agreed maximum of 261.5 million.

After the IPO, Yahoo would have the right to sell its remaining Alibaba shares at its discretion, Yahoo said.

A spokesman for Alibaba said that the terms of the previous agreement, which permitted Yahoo to sell only after a one-year lock-up period following the IPO, would remain in force.

On Tuesday, Yahoo announced second-quarter results from Alibaba, in which it holds a 24 percent stake, underscoring the Internet, retail and content company's rapid growth.

Alibaba's revenue grew 61 percent to $1.74 billion in the April to June period, while net income jumped 159 percent to $707 million. That pace is down from 71 percent in the first quarter, but still exceeded BGC Partners analyst Colin Gillis' forecast for about 54 percent.

(Reporting by Edwin Chan; Editing by Bernard Orr and Andre Grenon)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Tech Buzz

Reuters Showcase

Google Drones

Google Drones

Google tests drones for deliveries.  Video 

New iPhone

New iPhone

Apple working with NXP for pay-by-touch technology in new iPhone - FT.  Full Article 

Legal Case

Legal Case

Bitcoin promoter to plead guilty to unlicensed money transmission.  Full Article 

Online Crackdown

Online Crackdown

China's Tencent shuts messaging accounts after censorship rules - state media.  Full Article 

Hot Commodity

Hot Commodity

Data scientists are increasingly becoming important to the world's tech companies.  Video 

Agriculture App

Agriculture App

CME Group smartphone game lets students "beef up" on ag economics.  Full Article 

Copyright Dispute

Copyright Dispute

Oracle loses bid to restore $1.3 bln SAP verdict, could get new trial  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage