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Yahoo to keep larger Alibaba stake than planned Yahoo to keep larger Alibaba stake than planned
(about 2 hours later)
Yahoo will keep a bigger stake in Alibaba than originally planned, after the Chinese firm sells shares on the stock market. Yahoo will keep a bigger stake in China's e-commerce giant Alibaba than originally planned, after the Chinese firm sells shares on the stock market.
Yahoo now plans to sell up 208 million of the 523 million shares it owns. It originally agreed to sell 261.5 million. It now plans to sell up to 208 million of its 523 million shares. It initially agreed to sell 261.5 million.
Alibaba is expected to launch its shares sale next year and could value the company at $15bn (£9.4bn). Alibaba is expected to launch its share sale next year and could be valued at more than $100bn (£64bn).
Yahoo also announced a slight fall in third quarter sales to $1.81bn. Analysts said Yahoo was looking to cash in on the listing, not least because of Alibaba's continued growth.
Profits fell to $297m in the third quarter compared to $3.16bn in the third quarter of 2012. "The idea is you don't want to have to sell at the initial public offering (IPO) price, you want to sell later to potentially get the appreciation going up," said Ben Schachter, an analyst with Macquarie Research.
However the 2012 results included a $2.8bn gain from the sale of part of its Alibaba holding. Alibaba is China's largest e-commerce group and has been growing fast, raising speculation that its stock price will rise after listing as investors bet on continued growth.
Alibaba is China's biggest online retailer and is growing fast. According to Yahoo, the Chinese firm's sales grew 61% in the April-to-June period to $1.74bn and net income jumped 160% to $717m.
Sales grew 61% in the April to June period and net income jumped 160% to $1.74bn. The announcement to hold to a higher stake came as Yahoo reported that its profits fell to $297m in the third quarter, compared to $3.16bn a year ago.
Analysts say Yahoo is holding on to a greater part of its stake in Alibaba because it thinks that fast growth will make the shares even more valuable. However, the 2012 results included a $2.8bn gain from the sale of a part of its Alibaba holding.
It also announced a slight fall in third quarter sales to $1.81bn.