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Anyone looking into Alibaba IPO/Yahoo stock price effect?
http://www.bloomberg.com/apps/news?p...d=aAnJbtzBmDWE
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Yes. An analyst calculated the effect of Alibaba IPO to be about $2.50 in YHOO's share price. I ran the numbers in the prospectus and came up with something very close. I did not look through all of YHOO's assets and earnings to see if it's already priced in but with a quick look at YHOO's fwd P/E of 57 vs GOOG's 34, it might already be well priced in and more.
According to my numbers, if Alibaba doubles on day one, YHOO's share price should go up a little less than $2. With these crazy Chinese IPOs, who knows what will happen.
Alibaba is also priced at 106 trailing P/E and 66 fwd P/E @ $13.5HKD. I'm unconvinced they can continue to grow at this pace for the next few years. One thing to note is that YHOO owns 39% of Alibaba's parent company and if they IPO Taobao.com and Alipay.com (Chinese equivalent of eBay and Paypal), we'll probably see some more massive hype for YHOO. Alibaba Group has a few other internet properties but nothing worth writing about.
Anyway, despite all that, I picked up a few YHOO JAN 35 CALLS earlier this week just for [censored] and giggles.