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Monday, Sep 30
Report: Bankers want Alibaba to have $100B IPO valuation
- A banking source tells BI's Nicholas Carlson the banks working on Alibaba's IPO want the Chinese e-commerce giant to go public at a $100B valuation.
- If current valuations for high-growth Internet names hold up, there's a good chance Alibaba will end up being worth more than $100B. The company had Q1 revenue of $1.38B (+71% Y/Y) and net income of $669M. Facebook, currently worth $125B, had revenue of $1.81B (+53% Y/Y) and net income of $488M in its blowout Q2.
- Yahoo (YHOO), which rallied last week (I, II) thanks to Alibaba-related news, is near breakeven after opening lower. Citi raised its PT to $39 from $31 this morning, citing a higher valuation for the Alibaba stake and improving search trends.
- The firm now thinks Alibaba can deliver 2014 revenue of $10B and net income of $4.3B (up from a prior $9.7B and $4B), and believes Yahoo will be able to at least partly sell its 24% stake (valued at $16/share) in a "tax-efficient" manner.
- Citi also observes comScore estimates Yahoo saw 22% Y/Y search paid click growth in August. Yahoo, whose search revenue per query has long trailed Google's, saw 21% paid click growth in Q2, partly offset by an 8% drop in cost per click.