Yahoo
is one of the most popular American multinational business that provides a web
portal, search engine, e-mail and other related services to its customers. Yahoo
was founded in January 1994 by David
Filo and Jerry Yang and was
later incorporated on March 1, 1995.
The company went Public on April 12, 1996.
Yahoo
had recently capitalized upon an opportunity to enhance its value through
selling 40 of its stake in the company Alibaba and hence gaining cash, which
could be used for acquisition of a small company, enhancing visitor traffic on
the site or payment of greater dividends to shareholders. However, all did not
go according to plan.
After
the stock market offering, Yahoo discovered that its stakes in Alibaba might
actually be of lesser value than it thought. The firm experienced a decline in
shares of up to 6.6% as the stock market reacted to the details of the public
offering documents that were filed by Alibaba. The stock price was quoted at 33.76 today whereas it was 36.59 at the
beginning of the week indicating a slight decline. This was accompanied by a
slight decrease in Yahoo’s stock charts as well.
The valuations have
taken the investors by surprise as authentic stock market analysts have claimed
that the valuation was less than what the investors were thinking it would be.
Yahoo now needs to think of the best possible utilization of the cash it will
obtain from the deal in order to curb the effects of this set back.
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