Yahoo! Inc. (YHOO) Submits Initial Filing of Alibaba Stake Spinoff

Yahoo Sunnyvale

Yahoo! Inc. (NASDAQ:YHOO) filed a Form N-2 Registration of Statement under the Investment Company Act of 1940 with the Securities and Exchange Commission (SEC) today.

The filing is related to its previously announced plan to spin-off its stake in Alibaba Group Holding (NYSE:BABA) into a newly formed independent, publicly traded, registered investment company.

The name of the new public company is Aabaco Holdings, which will hold Yahoo’s 15% stake or 384 million shares in Alibaba. Aabaco Holdings will also hold Yahoo Small Business.

Yahoo will not retain any ownership in Aabaco Holdings after the spinoff. The employees, directors, and officers of Yahoo who own shares of the company’s common stock on the record date of the spin-off will receive shares of the common stock of Aabaco Holdings in the same ratio as other shareholders.

Early this year, Yahoo disclosed its intention to distribute all of the shares of Aabaco Holdings pro rate to its shareholders under its spin-off plan. Yahoo expected to complete the spin-off in the fourth quarter of 2015, subject to the approval of Yahoo board of directors and some other conditions.

Aabaco Holdings investment objective

The investment objective of Aabaco Holdings is to “seek returns for its stockholders primarily through owning the Alibaba shares. “The Fund expects the value of its Alibaba shares to exceed 95% of the value of its total assets immediately following the completion of the spinoff.

Aabaco Holdings aims to achieve its investment objective by continuing to invest at least 80% of its total assets in the shares of Alibaba under normal market conditions.

Alibaba’s stock price increased 2.26% to $83.37 per share on Friday. The stock traded between $76.21 and $120 per share over the past 52 weeks. Chinese e-commerce giant lost almost 20% of stock value year-to-date.

Yahoo stock performance

The shares of Yahoo closed $39.68, up by almost 2% on Friday. The stock increased additional 0.44% to $39.85 per share during the extended hours trading following the company’s announcement regarding its regulatory filing.

Yahoo’s stock traded between $32.93 and $52.62 per share over the past 52 weeks. The company lost more than 21% of stock value year-to-date.