Stock talk: Yahoo, Alibaba shares falling

Yahoo and Alibaba — two companies in the spotlight this week — are seeing their shares fall sharply today, in the wake of Yahoo’s decision to spin off its stake in Alibaba, and the Chinese e-commerce giant’s earnings results today.

Yahoo’s stock is down more than 7 percent today after the company’s announcement Tuesday that it would spin off its nearly $40 billion stake in Alibaba into a holding company.

Analyses of the impact of the decision on the Silicon Valley Internet giant differ. After the spinoff, Yahoo will be valued at about $10 billion, sparking speculation about it being a takeover target. Why would anyone want to buy the troubled company? An analyst is cautiously optimistic about the turnaround efforts of CEO Marissa Mayer: “I used to be very bearish on the prospects of what they could possibly do,” Ben Schachter, an analyst with Macquarie Securities, told the New York Times. “Today, while I’m not fully convinced that the turnaround can succeed, I’m more impressed than I was even six months ago.”

What does all this mean for Mayer? Some reports say the CEO, who has been at the helm for more than two years, has bought herself more time to turn Yahoo around; others say Mayer is “losing a precious security blanket” because the core business will be on center stage more than ever.

As for Alibaba, its shares are down more than 9 percent today after it reported fourth-quarter profit (81 cents a share) that beat expectations but sales ($4.22 billion) that did not. Its earnings release comes amid the company’s battle with Chinese regulators, who accuse Alibaba of failing to do enough to prevent sales of fake goods. Alibaba disagrees, and it’s preparing a formal complaint against the government.


Photo from Associated Press archives



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  • Who would want to invest in a Chinese company now when their own government tries to ruin them. Poor judgement (in the long run) for their economy and their country. What a disappointment!