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Alibaba could be worth $95B post-IPO, thinks Reuters' John Foley after doing some quick math -...

Alibaba could be worth $95B post-IPO, thinks Reuters' John Foley after doing some quick math - that would give Yahoo (YHOO - $27.4B market cap) a $22.8B stake. Foley's assumptions: the Chinese e-commerce market grows 35%/year for the next 2 years (less than 2012's growth); Alibaba keeps an 80% transaction share and 30% op. margin, while roughly doubling its take rate to 5% (still well below eBay's); and (like Tencent) it's valued at 25x forward EPS. One big caveat: Foley assumes Alibaba, which depends on ad sales, will either start charging merchants or raise ad prices via targeted ads. Oppenheimer has valued Alibaba at $77B. (The Economist)
Comments (5)
  • Stone Fox Capital
    , contributor
    Comments (5788) | Send Message
     
    so its worth 3x BIDU??? Seriously doubt that. Buy BIDU instead.
    28 Apr 2013, 11:19 AM Reply Like
  • Sam Liu
    , contributor
    Comments (3864) | Send Message
     
    Alibaba actually does services for the community (sales and marketing for small businesses).

     

    As a user of both, I would have to favor a far greater valuation for Alibaba.

     

    Sort of like comparing Yahoo to Ebay (and to that a further extent)!
    28 Apr 2013, 05:18 PM Reply Like
  • Nocturnian
    , contributor
    Comments (41) | Send Message
     
    Alibaba is the 2nd largest online advertising company in China behind Baidu. Baidu search results does not have Alibaba products/prices/invent... as Ali blocks its crawlers; so its blocked from 75% of Chinese online shopping content. For that reason, many Chinese consumers dont actually use Baidu for online shopping searches. Alibaba also has many other means of monetizing its almost monopoly ecommerce platform. So far they have not, by design. The potential for Alibaba is huge versus Baidu, which has 2 major challenges: 1) the ability to monetize mobile as traffic migrates from PC to mobile, and 2) Qihu is taking Baidu's shares.

     

    Even though Alibaba is a private company, its viewed as one of the big 3 Chinese internet giants. Baidu and Tencent are the other 2. However, Baidu is an easy distant 3rd amongst the trio. Dont confuse Baidu with Google. There are many structural reasons why its hold on the Chinese internet space is much weaker than Google grip on the US.
    29 Apr 2013, 01:29 AM Reply Like
  • deercreekvols
    , contributor
    Comments (5152) | Send Message
     
    "Quick math?" Assumptions?
    This is not what I expect from SA and Market Currents.
    Somebody guessed at a figure and this is news?
    A slight difference between $95B and $77B.
    Felix Unger famously said what happens when you "assume."
    28 Apr 2013, 01:46 PM Reply Like
  • DoctoRx
    , contributor
    Comments (1285) | Send Message
     
    As far as my personal interests go, both valuations are bullish for YHOO. Goldman has a PT of $30 with a lower Alibaba IPO price than anything suggested in this article. So I look at YHOO as a continued hold, and continue to look for $30, perhaps by yearend. (Perhaps sooner?)
    14 May 2013, 06:05 PM Reply Like
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