Yahoo to keep larger Alibaba stake than planned
- 16 October 2013
- From the section Business
Yahoo will keep a bigger stake in China's e-commerce giant Alibaba than originally planned, after the Chinese firm sells shares on the stock market.
It now plans to sell up to 208 million of its 523 million shares. It initially agreed to sell 261.5 million.
Alibaba is expected to launch its share sale next year and could be valued at more than $100bn (£64bn).
Analysts said Yahoo was looking to cash in on the listing, not least because of Alibaba's continued growth.
"The idea is you don't want to have to sell at the initial public offering (IPO) price, you want to sell later to potentially get the appreciation going up," said Ben Schachter, an analyst with Macquarie Research.
Alibaba is China's largest e-commerce group and has been growing fast, raising speculation that its stock price will rise after listing as investors bet on continued growth.
According to Yahoo, the Chinese firm's sales grew 61% in the April-to-June period to $1.74bn and net income jumped 160% to $717m.
The announcement to hold to a higher stake came as Yahoo reported that its profits fell to $297m in the third quarter, compared to $3.16bn a year ago.
However, the 2012 results included a $2.8bn gain from the sale of a part of its Alibaba holding.
It also announced a slight fall in third quarter sales to $1.81bn.