Yahoo! Inc. (YHOO)’S Shares Dancing to the Tunes of Alibaba Group Holding Ltd (NYSE:BABA) IPO Pricing

A few days ago, not all the investors in America knew who Alibaba Group Holding Ltd (NYSE:BABA) was. But they know it today, and the reason is very evident- $68 a share on late Thursday! Yahoo! Inc. (NASDAQ:YHOO) in the meanwhile, was always positive on Alibaba, perhaps because it knew the potential of Chinese e-commerce website. Because of this, the shares of Yahoo have started dancing on the pre-trade market. The company managed to gather 1.8% after its price target was increased from $39 to $43 by the Cantor Fitzgerald, L.P., a firm providing investment services.

Yahoo’s Good Luck riding on Alibaba

The research analyst at Cantor Fitzgerald, Youssef Squali is expecting that the gross proceeds for Yahoo would total at $9.5 billion, given the IPO pricing of Alibaba. Yahoo is making a sale of 140 million shares of the latter in this IPO.

This indicates that Yahoo had seen it coming all way long, ever since it first bought the shares of the Chinese firm which is seen in line with, Inc. (NASDAQ:AMZN).

Additionally, it is also indicating that Yahoo’s remaining stake in this IPO, viz. 384 million shares will value at $34.5 billion with the one year price target of Squali’s at $90 a share of Alibaba. BABA has already started trading on the New York Stock Exchange.

Surprisingly, until Thursday, the stock of Yahoo was running up 18% ever since July 2014 end. But, now it was riding high merely 4.1% year to date.

Yahoo’s Future Plan

Yahoo has yet not disclosed about its plan for further business. However, given the current scenario of the company, it is expected that Yahoo might infuse a part of the amount into its revamping process. Rest of the amount might go into the the shareholders’ account, after deciding on the strategy for future.