Yahoo Reaches Deal in Dispute Over China’s Alipay
NEW YORK – Yahoo shares dropped in early Friday trading amid a broader market decline even though the Internet company said it has reached an agreement with Chinese Internet group Alibaba in a dispute over the transfer of online payment arm Alipay to a firm controlled by Alibaba's CEO.
Yahoo, Japan's Softbank and Alibaba said early in the day that they have agreed on a way to allow Alibaba, in which Yahoo owns a 43 percent stake, to continue participating in Alipay’s financial performance.
In May, investors sold off Yahoo stock when it announced that Alibaba had spun off Alipay earlier in the year without Yahoo receiving any payment.
Under the deal, Alibaba will get $2 billion-$6 billion in the case of an IPO or sale of Alipay, which says it is the largest third-party online payment platform in China, the companies said.
"This is a good outcome for Yahoo and for our shareholders, as well as all the parties to this agreement," Yahoo CEO Carol Bartz said in a statement.
In pre-market trading, Yahoo’s stock was up, but it declined after the market opened. As of 10:30am ET, Yahoo shares were down 1.6 percent at $13.29. Before the Alipay controversy erupted, the stock had closed April at $17.70.