Alibaba Halts Trading Following Yahoo Shakeup, Prepares "Price Sensitive" Statement
Alibaba Group, the investment firm behind business-to-business website Alibaba.com, suspending trading of the company's shares in Hong Kong yesterday. In a filing with the Hong Kong stock exchange, the company said it was halting trading in anticipation of a "potentially price sensitive" statement to be issued soon.
On Wednesday it was announced that Alibaba Group was finalizing terms on a $3 billion dollar loan, which some analysts believe will be used to buy back the company's shares from Yahoo Inc. The U.S.-based web giant acquired a 40 percent stake in Alibaba in 2005 as part of a strategic partnership. In November, a group of investors acquired a 5 percent stake in Alibaba for $1.6 billion, which could place the value of Yahoo's shares at close to $13 billion.
The two companies have had a contentious relationship as of late. The fast-growing Alibaba has spent the past six months publicly stating its desire to retain full control of its assets, going so far as to shift the ownership of various subsidiaries in order to reduce the company's value and, by extension, the cost to buy back its shares from Yahoo.
Tuesday's departure of chairman Roy Bostock and three other directors may be partly responsible for the flurry of activity. Bostock, as well as Yahoo co-founder and former CEO Jerry Yang, who left the company in January, were both resistant to selling the shares back to Alibaba. The changing board of directors at Yahoo may make the ongoing negotiations more favorable for the Asian conglomerate.
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