Yahoo! Inc (NASDAQ:YHOO), the most difficult company for an analyst to evaluate, has a market capitalization of $36 billion. Nonetheless, the capitalization of the company does not reflect its stake in the Alibaba IPO completely.

The stocks of Yahoo! Inc (NASDAQ:YHOO) recently dropped more than 11 percent and came down to $41.57.

Yahoo! Inc (NASDAQ:YHOO) owns around 24 percent of Alibaba (the biggest e-commerce company of China). Sources have it that Alibaba will launch its IPO (initial public offering) in the late September 2014. Alibaba was planning on selling around 208 million of its shares on the market debut; however, it reduced the number to 140 million shares. Analysts are of the view that once Alibaba offers its shares to public, the market value of the company will reach the figures of $150 billion- $180 billion.

According to the market researchers, Yahoo! Inc (NASDAQ:YHOO) will have around 56 percent of its market value in cash by the latter part of the month of September- meaning that its operational business will be worth around $16 billion despite its different financial metrics.

Moreover, the researchers are of the view that the shares of Yahoo! Inc (NASDAQ:YHOO) are valued at quite a low price, especially when the company has reasonable debt levels, remarkable profit margins, and operational cash flow of $357 million.

Hence, the best way to benefit from the offering of Alibaba is to coordinate with the broker-dealer. However, as everyone knows that the shares of a ‘spotlight’ company are very difficult to buy; the second best option is to approach Softbank Corporation (9984: Tokyo)

Softbank Corporation (9984: Tokyo) owns around 30 percent of Alibaba. The company also has 42 percent shares of Yahoo! Japan, the biggest internet company of that region, when Yahoo! Inc (NASDAQ:YHOO) itself owns only 35 percent shares of Yahoo! Japan.

According to market analysts, investors will gain more from Alibaba if they approach it with Yahoo! Inc (NASDAQ:YHOO) instead of Softbank Corporation (9984: Tokyo) as Yahoo! Inc (NASDAQ:YHOO) has constantly reported good numbers.

Coming to the share prices of Yahoo! Inc (NASDAQ:YHOO), the company, on the last trading day, August 14, 2014, started its stocks at a price of $36.32 and closed at an increased price of $36.36. The intraday range for the company was recorded to be around $36.17 to $36.42. As far as the market capitalization of the company is concerned, it is reported to be around $35.99 billion, with a price to earnings ratio of 31.2.

Chances are that the prices of Yahoo! Inc’s (NASDAQ:YHOO) stocks will increase once Alibaba offers its shares to the public.

Coming to the prices of Softbank Corporation (9984: Tokyo), the company, in the last trading session, opened its stocks at a price of 7,056 Yuan and closed at the same price. The company has a positive EPS (earnings per share) right now, with figures currently at 307.72 Yuan. As far as the company’s dividend growth for the last 5 years is concerned, the numbers are reported to be around 74.11 percent.

 

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