This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Alibaba IPO Filing Indicates Yahoo! Undervalued: StockTwits.com

NEW YORK (TheStreet) -- Alibaba filed with the SEC Tuesday evening and investors want in on its forthcoming IPO. But, until the Chinese company debuts on a U.S. exchange later this year, would-be Alibaba shareholders are bidding up Yahoo! (YHOO) in anticipation of the company making tens of billions off of its 24% stake in the world's largest e-commerce Web site.

$YHOO not just a rumor anymore watch for yaho to finally push past $37 tomorrow in earnest ? Robb M to protect the innocent (@Unicorn_Apocalypse) May. 6 at 05:48 PM

@CaballoBlanco damn, noticed there is a lot of open interest and volume in $yhoo OCT calls... looking to long ali and get yahoo calls.. ? Chuck (@Cjgross78) May. 6 at 05:51 PM

Yahoo! rose about 1% in after hours trading to $36.49-per-share as Alibaba's SEC registration circulated the Web. The company disclosed key information in the filing. Highlights include:

$248 billion in merchandise sold on Alibaba's retail sites last year.
$231 million "active" buyers visit Alibaba each year.

On average, active buyers order merchandise 49 times each per year.
136 million mobile annual users $37 billion in merchandise ordered via mobile devices last year
Credit Suisse, Deutsche Bank, Goldman Sachs, J.P. Morgan, Morgan Stanley and Citigroup will underwrite the offering.

What wasn't in the filing was the IPO price or a real number of how much Alibaba will raise. In the registration document, Alibaba says it plans to raise a maximum of $1 billion, though most investors say that is a placeholder number that is up to 20X less than Alibaba actually intends to raise.

$YHOO $1 billion figure is a placeholder & likely 2 change once bankers start to gauge investor appetite. The deal could reach >$20 billion ? Catalystinvestor (@Catalystinvestor) May. 6 at 05:40 PM

Without an IPO price, investors can't pinpoint a valuation for Alibaba. But, based on the valuations of other e-commerce sites such as Amazon  (AMZN) analysts estimate Alibaba's worth between $115 and $245 billion.

Amazon has a market cap of $136.84 billion and made $74.45 billion in 2013. Unlike Alibaba and eBay  (EBAY) Amazon does not report the value of all merchandise sold on its site. But trade publication Internet Retailer estimated Amazon's gross merchandise volume to be around $92 billion in 2012. That number undoubtedly grew in 2013 given that Amazon's net sales climbed 22%.

The midpoint of Alibaba's value range would peg the company at $180 billion. That would make Yahoo!'s stake worth $43.2 billion. Yahoo!'s market cap, as of Tuesday's close, was $37.64 billion.

Some investors on StockTwits anticipate that Yahoo! will skyrocket tomorrow on the Alibaba valuation alone.

$YHOO Preview is $195 billion, yahoo mkt cap is $38billion and the own 24%... Should be 50bil just on AliBaba ? Michael (@Mrbergmann47) May. 6 at 05:51 PM

$YHOO This will be well above 40 by the time of the ipo. Should be 40 by EOW ? alex miller (@leemiller23) May. 6 at 05:35 PM

simple math. assume $YHOO 's $30B cap is worthless. it owns 24% of 200B of alibaba. thats $48B + its $4B cash = $52B. undervalued ? Sickled Systems (@sickledsystems) May. 6 at 05:30 PM

Others, however, say the Alibaba IPO is overhyped and could prove less valuable than most think. Amazon, as part direct seller, part marketplace, arguably takes in more profits than a marketplace alone. And Amazon often struggles with profitability.

$YHOO Aliababa will ipo at $ 100 billion only and Yahoo will crash. ? Barry Bye (@BarryBye) May. 6 at 05:13 PM

But most StockTwits' investors on bullish on Alibaba and Yahoo!'s stake. Sentiment on Yahoo! is 90% bullish, according to StockTwits' analytics.

At the time of publication the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,131.97 +100.83 0.59%
S&P 500 1,998.98 +14.85 0.75%
NASDAQ 4,552.7590 +33.8570 0.75%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs