Oh Yeah, and Yahoo's earnings were pretty good as well.
Yesterday, Yahoo (
) reported 1Q earnings that beat on revenue and EPS (.38c on
The street has applauded today, raising their target prices on
the stock to an average of $43.50 if we look at the average of
the top 11 analysts who came out with revised price targets this
Yahoo shares are +5.4% today and +10.1% since hitting lows
last friday on the Nasdaq bloodbath.
Yahoo shares had suffered over the last month on China
internet bubble fears and the whisper numbers on the Alibaba
valuation into the IPO being well below the bandied about $150Bn
level which were assumed only 2 months ago.
At $150bn, Yahoo's SOTP (sum of the parts) valuation is
well north of $40. Yahoo owns a 24% stake in Alibaba. Yahoo also
owns a 35% position in Yahoo Japan (market cap of $27Bn).
If you believe that Alibaba will fetch $150bn in IPO, you get
$36Bn in market cap accreted to Yahoo. Yahoo Japan is another
$7Bn. This leads you to 43Bn in market cap, even after a 5.4%
rally trades with a $36.8Bn market cap.
Alibaba numbers reported last night were much stronger than
expected for 4Q '13. Alibaba doubled revenues realizing
+66% growth/y. The fourth quarter was highlighted by the $5.6Bn
shopping spree that Chinese consumers carried out on China's
version of "Black Friday," known as "11:11" or "Singles Day".
At $33.00 Yahoo shares have seen solid support over the recent
pullback with three different tests. The trade in Yahoo remains
higher to $40.00 until we get real levels on the IPO