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Yahoo! Is Not the Way to Go on Alibaba

NEW YORK ( TheStreet) -- With Alibaba's initial public offering on the way, many investors think buying shares of Yahoo! (YHOO - Get Report) is a way to benefit.

Although I like Yahoo! as a longer-term technology turnaround, it only owns about 24% of Alibaba shares.  I have other concerns about Yahoo! as well.

The IPO of the Chinese e-commerce giant is expected to lift the value of that company to as high as $200 billion. If that's the case, Yahoo!'s stake would equal a payday valued at close to $48 billion. That's more than the current market cap of Yahoo!, which is about $36.45 billion.

In the past 12 months, YHOO shares have jumped 75% from the 52-week low to the recent high and was a compelling investment theme when the shares were trading at less than $23. They closed Tuesday at $36, down 11% for the year to date.

The following one-year chart is a good look back to how well the company has done under the leadership of CEO Marissa Mayer.

YHOO Chart YHOO data by YCharts

With the rising quarterly revenue per share growth and the year-over-year quarterly earnings per share in the last reported quarter up 28%, according to Yahoo! Finance, no one can say that Yahoo!'s stock performance is all due to its Alibaba stake.

But this analyst feels that stake is baked into the Yahoo! cake.

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