SFTBY
How could this stock go down when it owns 34% of BABA.
Couldn’t they sell some on a secondary offering?
Also what was significance of SFTBY’s statement there would be dilution of stock with BABA’s input?
Comments welcome.
NickPerrone
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I share your pain, Nick. I had a lot of call options on Yahoo, the second biggest holder of Alibaba and felt they should also rise on the successful IPO. However, as their share price declined, I had to bail out in a hurry as thousand of dollars in profit was disappearing. It shows that just because the main stock does well, its partners may not. I believe that the key holders of the two stocks made sure they took their profits and may have invested those into Alibaba. I understand now that my best play would have been to sell half my positions the week before when they had doubled to make sure I got my profits. Another example of how hellish it is sometimes to make money in an unpredictable market.
Thanks for your comments Allen.. I always felt Yahoo was not in good shape because the best (and maybe only) thing they had was their holding in BABA and they sold a good chunk of it on the IPO. Marissa was not making any significant changes which bolstered their outlook.
But I understood that SFTBY had a good growing business and also has 34% of baba which is worth about $70B +.Travis had made some comments about SFTBY vs YHOO and seemed to lean towards SFTBY because of its essential strength. Perhaps he may have some thoughts about this seeming paradox.
I do prefer Softbank to Yahoo — but Softbank carries a lot of debt as well and has the huge question of what to do with Sprint. If they had been able to merge Sprint with T-mobile as they wanted this would be a spectacular long-term buy — as it is, I think it’s a very well run and opportunistic company with some good potential in dozens of areas, but that doesn’t mean there’s a firm reason why it should be 20% cheaper or 20% more expensive at this particular moment. I’ve never owned any of the three (Sofbank, Alibaba or Yahoo)