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The stock has been enjoying four straight days of gains, up 3.39% to $35.75, edging towards last month’s high of $36.16.
This was partly fuelled by Alibaba’s update last week to its IPO filing back in May. This suggests it now values itself higher at $130 billion, up from $117 billion.
The raised estimate was based on a higher share price granting stock compensation to employees, now at $56 per share, up from $50 in the previous filing.
However, many analysts are valuing the company much more, so we could still see Alibaba’s stock price debut at a higher level.
Yahoo’s share price could get a further lift on the back of any positive information related to the Chinese Internet giant later tonight, which could make it attractive to sell on the rally.
Yahoo owns a 24% stake in Alibaba and investors are now waiting for clues from Yahoo’s CEO, Marissa Mayer, on how she plans to use the cash haul. A lack of details on future plans could leave some investors disappointed and put a lid on any further gains.
There is also a bias to the downside that could hold Yahoo back from breaking above its 200 daily moving average (DMA). The stock is also currently trading under a Death Cross formed in May, when its 50 DMA crossed below its 200 DMA.
The market consensus on its 12-month target price is at $40.92.