Alibaba restructures Alipay agreement; Yahoo ticks higher


In a new F-1, Alibaba (Pending:BABA) discloses it has restructured its agreement with Chinese online payments giant Alipay and its parent, Small and Micro Financial Services.

Most notably, Alibaba will receive a 37.5% stake in Small and Micro/Alipay in the event of an IPO featuring a $25B+ valuation and $2B+ in gross proceeds. The deal is contingent on Alibaba's stake in Small and Micro not having reached 33% at IPO time. Previously, Alibaba's Alipay IPO payout was capped at $6B.

In the meantime, Alibaba will receive 37.5% of Small and Micro's pre-tax income in exchange for IP licensing and "software technology services." Its profit payout will be reduced in proportion to the equity stake it obtains in Small and Micro.

Alibaba is also selling assets related to its loan business for small/mid-sized companies (SMEs) to to Small and Micro for $518M, and entering into "software system use and service agreements" related to the SME loan business in exchange for an annual fee. From 2015-2017, the fee will be 2.5% of the average daily book balance for micro loans.

Yahoo (NASDAQ:YHOO) is up 0.8% AH.

Related tickers: OTCPK:SFTBF, OTCPK:SFTBY

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Comments (10)
  • Pete P.
    , contributor
    Comments (1019) | Send Message
     
    wow, this is great to see.
    12 Aug 2014, 05:21 PM Reply Like
  • lew69sd
    , contributor
    Comments (234) | Send Message
     
    $YHOO is going to 40 when this mammoth IPO happens...
    12 Aug 2014, 05:24 PM Reply Like
  • Pete P.
    , contributor
    Comments (1019) | Send Message
     
    I actually see it going a bit higher to $45+. I am a believer in Yahoo getting acquired at $60+
    12 Aug 2014, 05:41 PM Reply Like
  • Guy in Ithaca
    , contributor
    Comments (428) | Send Message
     
    Great news. More money for Alibaba and its shareholders.

     

    This should help nudge Yahoo! up.
    12 Aug 2014, 05:55 PM Reply Like
  • YhooAdvocate
    , contributor
    Comments (4) | Send Message
     
    I think $40 is the low end. Right now, the Yahoo core business is worth 0$. Its gotta be worth more than $4 or $5 per share after BABA goes public. I would have to think YHOO is worth closer to $50??
    12 Aug 2014, 06:20 PM Reply Like
  • YhooAdvocate
    , contributor
    Comments (4) | Send Message
     
    I think $40 is the low end. Right now, the Yahoo core business is worth 0$. Its gotta be worth more than $4 or $5 per share after BABA goes public.
    12 Aug 2014, 06:20 PM Reply Like
  • snamsa
    , contributor
    Comments (9) | Send Message
     
    It was at $39 not long ago so hoping to see the $45 plus price tag on Yahoo after $BABA ipo
    12 Aug 2014, 06:39 PM Reply Like
  • alpine
    , contributor
    Comments (2122) | Send Message
     
    It is great to see BABA clearing the decks financially and operationally pre its IPO. While the valuation of BABA (and consequently, YHOO) will be a difficult game for the next few months, what is clear is that BABA (and therefore, YHOO) will turn out to be one of the best Chinese companies with a global reach, and a business model and structure that AMZN and even WMT can only envy in years to come.

     

    For me, YHOO best potential is about 3-5 years out....as it's future is inevitably tethered to BABA's. One can only dream that BABA eventually takes out YHOO.
    13 Aug 2014, 05:18 AM Reply Like
  • User 10057881
    , contributor
    Comments (24) | Send Message
     
    This is indeed a great news and most positive for BABA IPO valuation and YHOO share price.
    16 Aug 2014, 08:10 AM Reply Like
  • Pete P.
    , contributor
    Comments (1019) | Send Message
     
    Definitely very positive for the IPO
    16 Aug 2014, 02:58 PM Reply Like
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