The Web portal’s shares fell 2.7 percent after Alibaba Group Holding Ltd. -- which Yahoo owns a stake in -- made its stock market debut yesterday. Yahoo, which sold more than 120 million of its 524 million Alibaba shares in the initial public offering, declined to $40.93 at the close in New York.
That put Yahoo’s market capitalization at $41 billion, less than the combined $45.2 billion value of the Sunnyvale, California-based company’s Asian assets. Yahoo’s remaining stake in Alibaba is now valued at about $37 billion, and the company also owns a piece of Yahoo Japan Corp. that is worth $8.2 billion, according to data compiled by Bloomberg.
Yahoo, led by Chief Executive Officer Marissa Mayer, has benefited for years from stakes in Yahoo Japan and Alibaba -- and the stock action shows just how much the company depended on those businesses for value. As investors took gains on Yahoo after Alibaba’s IPO, the true worth of the Web portal’s core online-advertising business was laid bare.
“The majority of the value from Yahoo continues to come from its asset base,” said Colin Gillis, an analyst at BGC Partners. “This is a company that still has troubling underlying metrics.”
Mayer, in a statement yesterday, didn’t address Yahoo’s valuation or that of its Asian assets.
“We congratulate our partners at Alibaba on completing today’s well-received IPO,” she said. “Yahoo has enjoyed a nine-year relationship with Alibaba, and we remain major investors in the company.
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