Yahoo!'s Stake in Alibaba IPO: What Wall Street's Saying

NEW YORK (TheStreet) -- Wall Street is aflutter following Alibaba's updated regulatory filing in which the Chinese e-commerce giant said late Friday that it plans to sell shares between $60 and $66 a piece, raising about $21 billion in an initial public offering.

Alibaba plans to sell 123 million shares in the IPO. Its principal shareholders, which include Yahoo! (YHOO) , will also sell shares bringing a total of 320 million shares to the U.S. market. Alibaba's shares will be listed under "BABA" on the New York Stock Exchange.

Yahoo!, which owns just about a quarter of Alibaba shares, plans to reportedly sell 121.7 million shares (23% of their own holdings), which would yield it about $8 billion in proceeds. Following the IPO, Yahoo!'s stake in Alibaba would come to about 16.3%, according to Bloomberg, citing the filing.

Read More: Jack Ma Says Alibaba to Be Judged on World Progress, Not Just China

Shares of Yahoo! rose 2.9% to $40.74 on Monday. Here's what analysts are saying about Yahoo! on Monday.

Carlos Kirjner, Bernstein Research (Outperform; $40 PT)

Alibaba has set the initial price range of its IPO between $60 and $66 and disclosed that Yahoo! will be selling 121M shares in the IPO. These are both slightly better for Yahoo! and its shareholders than what we had expected and offset the slightly worse than expected dilution of the Alibaba stake. We think Yahoo! will trade up in the next few days and possibly weeks because of the IPO and we maintain our outperform rating. That said, material upside from here is increasingly dependent on Yahoo! shareholders' ability to realize value in a tax efficient way from the 16% stake in the Alibaba Group remaining after the IPO.

Read More: Janet Yellen, Apple's iPhone, Alibaba's IPO Are Hot Stories After Labor Day

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