Yahoo sells direct stake in Alibaba.com
Yahoo has sold its direct stake in Alibaba.com for pre-tax proceeds of $150 million. The company still maintains 28 percent indirect ownership in the trading site.
Yahoo has sold 1 percent of its stake in the Chinese-based business-to-business trading site Alibaba.com, the company said on Monday. Reuters first reported on the story.
In November 2007,when it went public on the Hong Kong Exchange. Writing in an e-mail, a company representative said that Yahoo's "sale of its shares in Alibaba.com is expected to generate pre-tax proceeds of approximately $150 million."
Although Yahoo has sold its entire direct stake in Alibaba.com, it still indirectly maintains ownership in the company.
According to Yahoo, itin the Alibaba Group. "Alibaba Group owns approximately 70 percent of Alibaba.com," Yahoo wrote in the e-mail, "and as such, Yahoo continues to own an approximately 28 percent indirect interest in Alibaba.com."
Although its major holding is Alibaba.com, the Alibaba Group "also owns (Chinese Web sites) Taobao, Alipay, China Yahoo, and Koubei," the company wrote.
Yahoo's ownership interest in the Alibaba Group is, according to Yahoo, "an important long-term way to participate in the China market." It believes that through the Alibaba Group, it can solidify its position as a major investing partner with Chinese firms.
But that doesn't mean Yahoo will necessarily hold on to sites for too long. The company also wrote that it decided to sell Alibaba.com stock because its "1 percent direct IPO investment" increased so substantially that it felt compelled to sell it. Yahoo said that it "regularly evaluates its financial investments." If one of those investments seems profitable, Yahoo plans on selling the investment to yield that positive cash flow.