Where does your enterprise stand on the AI adoption curve? Take our AI survey to find out.
Chinese e-commerce giant Alibaba Group is raising more than $8 billion in a new round of funding, the majority of which will be used to buy back half of its shares from Yahoo, the New York Times reports.
The deal values Alibaba at as high as $43 billion, making it one of the most highly valued private Internet companies.
Yahoo currently holds a 40 percent stake in Alibaba, and the Chinese company plans to spend $7.1 billion to buy back 20 percent of its shares, according to the report. The amount will come from borrowing nearly $4 billion, along with sales of $2.6 billion common shares and $1.5 billion in preferred stock.
Yahoo paid $1 billion for a 40 percent stake in Alibaba seven years ago, when the Chinese firm was little known outside its home country. Today, the investment comprises more than half of Yahoo’s $20 billion value. Yahoo has agreed to sell back another 10 percent when the Alibaba Group goes public and divest the remaining holdings at a later date.
Among those financing the $8 billion in Alibaba are the sovereign wealth fund China Investment Group and the China Development Bank. The investment comes as Alibaba earned $1.8 billion in revenue during the first half of 2012, a 60 percent increase over a year ago, the Times reported. Yahoo stock, by comparison, has lost more than 50 percent of its value since it initially invested in Alibaba.
VentureBeatVentureBeat's mission is to be a digital town square for technical decision-makers to gain knowledge about transformative technology and transact. Our site delivers essential information on data technologies and strategies to guide you as you lead your organizations. We invite you to become a member of our community, to access:
- up-to-date information on the subjects of interest to you
- our newsletters
- gated thought-leader content and discounted access to our prized events, such as Transform 2021: Learn More
- networking features, and more