NEW YORK (TheStreet) –– The revelation that a company Alibaba has purchased a stake in now has accounting irregularities isn't likely to delay its initial public offering, slated to happen later this year, according to investors.
"I think this is a 36 hour story," Ironfire Capital co-founder Eric Jackson said in an email. "By the time the roadshow starts, it will be forgotten." Jackson, a long-time Yahoo! shareholder, has recently pushed for Yahoo! to be acquired by Alibaba or Japanese conglomerate Softbank.
A division of Alibaba Group, Alibaba Pictures Group said it would delay its first-half earnings report after the company found accounting irregularities. The irregularities occurred prior to the 60% stake Alibaba took in the company, previously named ChinaVision Media Group. Alibaba spent $805 million for the stake earlier this year, amid several other acquisitions.
Alibaba, which is partially owned by Yahoo! (YHOO), recently purchased AutoNavi, a company that provides digital map content and navigation and location-based solutions in China. In addition to the aforementioned Alibaba Pictures, Alibaba has acquired stakes in Youku Toudou (YOKU), Intime Retail, Singapore Post and Guangzhou Evergrande, a soccer team which Alibaba founder Jack Ma said he spent talking to the team's over for 15 minutes over drinks.
"I don't think it's a big deal," said one hedge fund analyst who declined to be named. "I need to look more closely at what the issue is but unless it was outright fraud, [it's] probably not a big deal. Studio accounting is kind of complicated and filled with assumptions."