Yahoo does a deal with Alibaba . . .and $6.3 billion lands in its bankbook
Yahoo is beginning to pull its cash out of Chinese Internet concern Alibaba, with the first tranche of money an impressive $6.3 billion.
Marissa Mayer: did she think again?
The Wall Street Journal said the move was "putting a long-anticipated move into motion and potentially handing the U.S. firm significant strategic resources."
Alibaba said in a statement it had closed the initial repurchase of half of Yahoo's 40% stake in the firm . Alibaba now had the right to repurchase half of Yahoo's remaining stake.
In addition to the $6.3 billion in cash, Yahoo will get $800 million in preferred stock in Alibaba and $550 million in an amended intellectual property licensing agreement.
Yahoo paid just $1 billion for its Alibaba stake in 2005, an investment that turned out to be a spectacularly good bet .
After Yahoo reached a deal in May to sell part of the Alibaba stake, it indicated it intended to return proceeds to shareholders. Then former Google executive Marissa Mayer took over as CEO in July, and Yahoo said it was undertaking a review that could change that plan.
Yahoo had $1.5 billion in cash and equivalents on its balance sheet as of the end of June.
Did Marissa change her mind? A Yahoo spokeswoman did not immediately respond to the WSJ's request for a comment.