Yahoo (YHOO) Gets Dumped by Alibaba
By: Leo Sun, dated May 17th, 2011
Shares of struggling former Internet search leader Yahoo (YHOO: Charts, News, Offers) crashed at the end of last week after its most valuable investment, Chinese e-commerce leader Alibaba Group, disclosed that it had spun off its online payment business, Alipay, into a separate entity owned by Alibaba CEO Jack Ma. This is a crushing blow to Yahoo, which owns 43% of Alibaba, which has now lost all connections to the highly profitable Alipay system, which is the Chinese equivalent of eBay’s (EBAY: Charts, News, Offers) PayPal. The decision to spin off Alipay was not approved by the Alibaba board, which includes Yahoo and Japan’s Softbank. Softbank currently owns 30% of Alibaba. Alibaba has fired back, claiming that the company’s directors were informed in July 2009 that Alipay would be transferred to Chinese ownership, in order to meet new government regulations on payment processors.
2011-05-21 22:52:29
Favorite Answer 2011-05-21 23:07:36