Yahoo stock surges in anticipation of Alibaba IPO 

click to enlarge Alibaba Group
  • AP Photo, File
  • Young men walk past the corporate logo at the headquarters compound of Alibaba Group in Hangzhou in eastern China's Zhejiang province in this May 21, 2012 file photo. The Chinese e-commerce giant Alibaba says it's gearing up to go public on a U.S. stock exchange in what is likely to be the world's biggest IPO this year. The company said Sunday March 16, 2014 that it has "decided to commence the process of an initial public offering in the United States."

Yahoo is benefiting once again from its stake in China's hottest Internet company, Alibaba Group.

Investors latched on to Yahoo Monday in anticipation of a huge windfall from Alibaba's initial public offering of stock later this year. Yahoo's stock gained $1.51, or 4 percent, to close at $39.11.

Alibaba ignited the excitement about its forthcoming IPO by announcing plans to list its stock on a U.S. exchange.

Yahoo Inc. is expected to sell about half its 24 percent stake in Alibaba as part of an IPO that analysts believe could raise $15 billion. That means Yahoo is likely to collect several billion dollars from AIibaba's IPO. That money could then be used to pay a special dividend to shareholders or buy back more of its stock.

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