×

China’s Alibaba Files for $1 Billion U.S. IPO, Which Will Give Yahoo Cash Infusion

Public offering by e-commerce giant will deliver cash windfall to Yahoo, which will sell a portion of its stake in Alibaba

Chinese e-commerce giant Alibaba Group on Tuesday filed in the U.S. for an initial public offering to raise up to $1 billion — a figure that analysts expect will rise — which will deliver a cash windfall to minority stakeholder Yahoo.

Alibaba, founded in 1999, claims it is the biggest e-commerce company in the world. For the nine months ended Dec. 31, 2013, the company generated revenue of $6.5 billion and net income of $2.9 billion. About 84% of Alibaba’s revenue comes from two main websites: Taobao, a consumer-focused e-commerce marketplace, and the business-to-consumer Tmall site.

Yahoo holds a 24% stake in Alibaba, and it’s set to sell 40% of that holding after the Alibaba IPO, according to the agreement between the two companies. That could yield more than $10 billion in proceeds, depending on the pricing of the IPO. Yahoo paid about $1 billion for its original 40% stake in Alibaba in 2005.

SEE ALSO: Why Alibaba’s IPO Matters to Hollywood

Alibaba’s IPO is expected later this summer at the earliest and analysts have frantically speculated that its initial valuation could be in the $150-$200 billion range.

Analysts also are mulling what Yahoo might do with the cash from the Alibaba offering, which will add to the Internet media company’s $4.6 billion cash and equivalents on hand as of March 31, 2014.

Yahoo could make a bid for rival AOL, or focus on acquiring smaller web companies to build traffic and challenge Google. One specific area Yahoo may pursue is bulking up its video business. The company last year launched unsuccessful bids for Hulu and Dailymotion, and CEO Marissa Mayer could be in the market to acquire a YouTube multichannel network.

Last week, Yahoo announced deals for its first TV-length scripted series at its Digital Content NewFronts: “Other Space,” a sci-fi comedy from exec producer Paul Feig, the writer-producer behind NBC’s “Freaks & Geeks” and director of “Bridesmaids”; and “Sin City Saints,” from exec producer Mike Tollin (“Smallville,” “One Tree Hill”) and director Bryan Gordon (“Curb Your Enthusiasm”).

Popular on Variety

More Biz

  • Beverly Hills Realtor Accused of Stealing

    Beverly Hills Realtor Accused of Stealing From Usher, Adam Lambert

    A Beverly Hills real estate agent has been arrested on charges of stealing from the homes of celebrities, including Usher, Adam Lambert and “Real Housewives” star Dorit Kemsley. Jason Emil Yaselli, 32, is accused of encouraging an accomplice, Benjamin Ackerman, to enter homes during open houses in order to steal from them. Ackerman allegedly sold [...]

  • Pod Save America Hosts on Trump

    'Pod Save America' Hosts on Trump, the Democratic Primary and What's Wrong With Cable News

    Like many Democrats, Tanya Somanader was blindsided by the 2016 presidential election. A veteran of the Obama White House and a former speechwriter and digital specialist for House Speaker Nancy Pelosi, Somanader was gearing up for a Hillary Clinton administration. Instead, she had to grapple with the reality of a Donald Trump presidency. “A lot [...]

  • Ann Sarnoff Warner Bros

    Ann Sarnoff Formally Takes Reins of Warner Bros. as CEO

    The Ann Sarnoff era at Warner Bros. has begun. Sarnoff formally took the reins as Warner Bros. chair-CEO on Thursday, two months after she was appointed to the post. Sarnoff told employees in a memo that she has been impressed by the company’s track record during the past year amid a period of upheaval for [...]

  • Former movie producer Harvey Weinstein (L)

    Harvey Weinstein to Be Arraigned on New Indictment

    Harvey Weinstein is set to appear in court on Monday for an arraignment on a new indictment, the Manhattan D.A.’s office said Thursday. Prosecutors announced last week that they would seek a fresh indictment, which would allow actress Annabella Sciorra to testify at Weinstein’s trial. The move came after Justice James Burke ruled on Aug. [...]

  • AI Technology David Beckham

    How AI Tech Is Changing Dubbing, Making Stars Like David Beckham Multilingual

    David Beckham does not speak Arabic, Hindi or Mandarin. But when the soccer legend starred in a PSA for malaria awareness this spring, he effortlessly switched among these and six other languages, thanks to cutting-edge technology that could soon change how Hollywood localizes its movies and TV shows. The PSA in question was produced with technology [...]

  • Eminem Publisher Sues Spotify, Claiming Copyright

    Eminem Publisher Sues Spotify, Claiming Massive Copyright Infringement

    Eight Mile Style, a publishing company that holds administration rights to Eminem’s early catalog, filed a major copyright infringement lawsuit against Spotify late Thursday, claiming that the streaming giant has no license to host about 250 of Eminem’s songs, while also taking aim at the Music Modernization Act, the federal law enacted last year to [...]

  • iQIYI headquarters building in Beijing

    China’s iQIYI in Talks for Indonesia Expansion

    Chinese streaming firm iQIYI is in negotiations to expand further into Southeast Asia through a venture with Indonesia’s Media Nusantara Citra. iQIYI announced its first step outside Chinese-majority territories in June, when it revealed a linkup in Malaysia with pay-TV leader Astro. It also operates in Taiwan. In April, the company said that it planned [...]

More From Our Brands

Access exclusive content