Alibaba Raises $21.8B in Initial Public Offering
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Re: Alibaba Raises $21.8B in Initial Public Offering
#2"[Yahoo] will have raised nearly $8.3 billion through the offering"
If I'm reading that right Yahoo stands to triple their cash position almost overnight which today stands at around $4b.(1)
Given Marissa Meyer's appetite for acquisitions this puts them into a potentially interesting new ballpark of scale.
Re: Alibaba Raises $21.8B in Initial Public Offering
#3"[Yahoo] will have raised nearly $8.3 billion through the offering" If I'm reading that right Yahoo stands to triple their cash position almost overnight which today stands at around $4b.(1) Given Marissa Meyer's appetite for acquisitions this puts them into a potentially interesting new ballpark of scale. (1) http://finance.yahoo.com/q/bs?s=yhoo
You would have to consider the after-tax amount, which is going to be a bit less...around $5-6 billion.
Re: Alibaba Raises $21.8B in Initial Public Offering
#4Gosh....that's barely more than WhatsApp. Woulda done better selling it to Facebook.
More seriously, the Economist put a valuation at $55-$120b. This puts it at $168b. Or 9 WhatsApps. The IPO was expected to raise $20b, so this is really good.
It took 3 years after founding in 1998 to reach profitability.
It defies most conventional notions of a startup, despite having started in somebody's apartment. It's unbelievably unfocused, it does pretty much every kind of business you can do on the Internet.
It might be one of the first Asian-style conglomerates to be born on the Internet.
There are plans for it to open brick and mortar stores.
Re: Alibaba Raises $21.8B in Initial Public Offering
#5Alibaba going for a higher selling price just makes the continued undervaluing of Yahoo itself increasingly hilarious. At some point, I would think someone will want to buy them for all of this free money they have sitting around.
YHOO market cap : 42.3bn
+ liabilities : 3.7bn
= 46bn (to own outright)
Cash on hand = 1.1bn
+ Other assets = 15.3bn
+ Cash from Alibaba sale = 8.3bn
+ Value of remaining Alibaba stock = 22bn
+ Value of Yahoo Japan stock = 9bn
= 55.7bn (of value, if you can unlock it)
Re: Alibaba Raises $21.8B in Initial Public Offering
#6Alibaba going for a higher selling price just makes the continued undervaluing of Yahoo itself increasingly hilarious. At some point, I would think someone will want to buy them for all of this free money they have sitting around. YHOO market cap : 42.3bn + liabilities : 3.7bn = 46bn (to own outright) Meanwhile: Cash on hand = 1.1bn + Other assets = 15.3bn + Cash from Alibaba sale = 8.3bn + Value of remaining Alibaba…
You are kind of assuming that you can have a "firesale" that realizes the full current market value of the $31 billion in Alibaba and Yahoo Japan stock. That's somewhat improbable.
Re: Alibaba Raises $21.8B in Initial Public Offering
#7Alibaba going for a higher selling price just makes the continued undervaluing of Yahoo itself increasingly hilarious. At some point, I would think someone will want to buy them for all of this free money they have sitting around. YHOO market cap : 42.3bn + liabilities : 3.7bn = 46bn (to own outright) Meanwhile: Cash on hand = 1.1bn + Other assets = 15.3bn + Cash from Alibaba sale = 8.3bn + Value of remaining Alibaba…
You are kind of assuming that you can have a "firesale" that realizes the full current market value of the $31 billion in Alibaba and Yahoo Japan stock. That's somewhat improbable.
True, this is very naive and presumes you can sell everything for their accounting values without moving the market price or people realizing what you're doing.
However, $17bn is a pretty big window of error, and this isn't even taking into account the crazy notion that you could keep running the actual business. It has revenues of $1bn a quarter, nothing to sneeze at.
Re: Alibaba Raises $21.8B in Initial Public Offering
#8Alibaba going for a higher selling price just makes the continued undervaluing of Yahoo itself increasingly hilarious. At some point, I would think someone will want to buy them for all of this free money they have sitting around. YHOO market cap : 42.3bn + liabilities : 3.7bn = 46bn (to own outright) Meanwhile: Cash on hand = 1.1bn + Other assets = 15.3bn + Cash from Alibaba sale = 8.3bn + Value of remaining Alibaba…
Stock is not cash. You can't sell it at the current value price. You can't even sell 0.1% of it without driving the price to zero. The liquidity is just not that large.
Re: Alibaba Raises $21.8B in Initial Public Offering
#9Planet Money had a decent piece on Alibaba recently: http://www.npr.org/blogs/money/2014/09/03/345310125/episode-...
Re: Alibaba Raises $21.8B in Initial Public Offering
#10Alibaba going for a higher selling price just makes the continued undervaluing of Yahoo itself increasingly hilarious. At some point, I would think someone will want to buy them for all of this free money they have sitting around. YHOO market cap : 42.3bn + liabilities : 3.7bn = 46bn (to own outright) Meanwhile: Cash on hand = 1.1bn + Other assets = 15.3bn + Cash from Alibaba sale = 8.3bn + Value of remaining Alibaba…
Stock is not cash. You can't sell it at the current value price. You can't even sell 0.1% of it without driving the price to zero. The liquidity is just not that large.
Consider that if I have a bunch of gold bars sitting in a vault somewhere, I don't have to sell them to make money off of them. I can borrow money against their perceived value, currently practically for free.
This becomes particularly interesting if I can buy $100 of gold bars for $50. Even if I can't sell them, I can use them to my advantage.