Two Things Might Move Yahoo!

 | Feb 11, 2013 | 9:30 AM EST  | Comments
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Yahoo! (YHOO) closed at a 52-week high on Friday. There was a lot of March $21 call buying in Yahoo! that day. 

This could be due to two reasons:

  1. Marissa Mayer will speak on Tuesday at a Goldman Sachs tech conference. It is likely to be the first of many appearances at such banking conferences over the course of the spring. It also probably predicts the likelihood that Yahoo! will do an analyst day in May or June of this year, which my cyber-Twitter friend Dan Nathan has pointed out a couple of times over the last few months. People are obviously expecting that major institutional investors will like what she has to say at these appearances.
  2. There was an FT article on Friday that said three sources told them that Alibaba Group planned to meet with its IPO advisors shortly after the end of Chinese New Year this week to make plans on when to go ahead with their big IPO. The most interesting tidbit in the article was the detail that, during their roadshow last year to raise money to help them buy back the first part of the stake Yahoo! owned in them, they had told potential investors that they planned to do an IPO in the second half of 2013 for a $59.5 billion valuation. No one on the sell side is expecting such a valuation for Alibaba in their current price targets for Yahoo!. Most are assuming that Alibaba is only worth $40 billion. If the IPO filing happens closer to the end of 2013, the valuation should be closer to something like $74 billion as I expect the market would start to look ahead to Alibaba's 2014 revenue and earning potential.

The Alibaba news could provide a bump to Yahoo!'s stock first thing on Monday.  But typicall this news gets faded during a trading day.

I expect that when Alibaba comes out and says that it has formally engaged Goldman and Credit Suisse to go public and that they've selected whether it will be Hong Kong only or a dual listing in Hong Kong and the U.S., there will be a noticeable bump to Yahoo!'s stock. But as we get closer to an actual IPO date and the completion of the IPO roadshow, that will really put a jolt into the price of Yahoo!.

But the Mayer Goldman presentation on Tuesday could provide some substantial support to Yahoo! as the week goes on. The Street wants to hear how she's going to tweak search to deliver meaningful revenues this year, some big improvements to display for next year and some longer-term fixes for mobile for three years from now. They didn't get that on the earnings call and want to hear it now.

Don't forget that Yahoo! is also probably back in the market providing a meaningful bid every day to the overall volume now that they've started up the $1.5 billion in purchases of stock with the cash left over from the initial buyback of their first tranche of the Alibaba stake.

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