Want to know how the Alibaba Group is doing, as the Chinese Internet giant moves forward with its potentially giant initial public offering?
Just take a look at Yahoo‘s latest earnings report.
As part of its latest quarterly disclosure, the American Internet company included more information about Alibaba’s performance, including its triple-digit-percentage profit growth. And it disclosed a new pact that will let it hold onto a slightly larger stake in the Chinese e-commerce giant after an I.P.O.
According to a Yahoo earnings presentation, its Chinese partner reported $707 million in profit attributable to ordinary shareholders for the three months ended June 30. That’s up 159 percent from the same time a year ago. And Alibaba’s sales were up 61 percent for the same period, to $1.7 billion.
Yahoo is privy to Alibaba’s financials thanks to its 24 percent stake in the Chinese e-commerce giant. The two companies first joined in 2005 when the American Web pioneer took a 40 percent stake for about $1 billion.
But by the time the two companies reached an agreement last year in which Yahoo agreed to sell its stake over time, Alibaba was valued at $35 billion. Deal-makers expect that when the Chinese Internet company goes public, perhaps as soon as the first half of next year, it will be valued at more than $75 billion.
Alibaba’s eye-popping growth has provided an enormous ballast to Yahoo’s own market value, which stood at about $34 billion as of Tuesday’s close. With that trajectory expected to continue, the American company has sought to hold onto its Chinese partner for a little bit longer: Yahoo also disclosed that a new agreement has reduced the number of shares that it must sell in an Alibaba I.P.O. to 208 million, down from $261.5 million
