Yahoo Sounds Willing to Listen on Alibaba

Yahoo issued an official statement about its plans for its 39% stake in China's Alibaba Group on Friday, yet somehow the issue seems more clouded than ever.
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NEW YORK (

TheStreet

) --

Yahoo

(YHOO)

issued an official statement about its plans for its 39% stake in China's Alibaba Group on Friday, yet somehow the issue seems more clouded than ever.

"We are not going to comment on any private discussions we may or may not have with our strategic partners," said Carol Bartz, Yahoo's CEO, in a press release. "As with all matters like this, any decisions regarding this investment would be driven by what will create the most value for our shareholders."

That last line is the most interesting of the release. Yahoo and Alibaba have had some strained relations of late, and Yahoo has made clear the investment in Alibaba is just that. And investments, at some point or another, get sold.

Yahoo shares

jumped on massive volume on Wednesday

after Susquehanna Financial Group issued a research note saying Yahoo was close to selling its holdings in Alibaba, a provider of e-commerce services, and that the stake could fetch as much as $11 billion.

Bartz was then quoted by

Reuters

on Wednesday saying Yahoo

wasn't planning to sell the stake

, and company spokespeople voiced similar sentiments to other media outlets.

Friday's statement. however, is a bit more circumspect, asserting the company's right to keep any talks private, and thus theoretically dredging up again the whole issue of whether Yahoo is indeed close to a deal. After all, if they were, they wouldn't tell anyone.

Yahoo shares closed Friday's session down 2.1% at $13.89, but the stock was the most active issue in extended trades, according to

Nasdaq.com

, with more than 18 million shares already having changed hands. Regular session volume of 75.8 million on its own almost four times the issue's usual churn of around 19.4 million.

An Alibaba spokesman

said Thursday

the two parties had exchanged proposals on the stake, but were unable to come to an agreement, so there is apparently a price out there that Yahoo would be willing to accept.

The speculation about Yahoo's plans for its Alibaba investment come with as the company has been unveiling some of its strategic plans for continuing its transition to primarily a content company from its prior focus on Internet search.

For example, on Wednesday, the company had a joint announcement with

Toshiba

about the availability of its Yahoo Connected TV service on several new Toshiba television models. Yahoo is also reportedly in the process of redesigning its e-mail service.

The jury is still out on Wall Street though. Nineteen of the 33 analysts covering the company rate it as a hold, according to

Thomson Reuters

, although their median price target of $19 represents plus 25% upside from current levels.

The company could provide more color on its plans when it reports its third-quarter results on Oct. 18. The current average estimate of analysts polled by

Thomson Reuters

is for a profit of 15 cents a share in the three-month period on revenue of $1.14 billion.

--

Written by Michael Baron in New York.

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