Shares of Yahoo (YHOO) are ticking higher this morning, adding nearly 5% on speculation that the web portal may sell its 39% stake in Alibaba Group for as much as $11 billion.
The bullish activity comes after Susquehanna Financial analyst Marianne Wolk stated in a research note that Yahoo’s sale of its stake in Alibaba Group “could be imminent.” Wolk notes that in her view “the monetization of Alibaba Group assets may enable new investment in YHOO shares, potentially attracting value investors unwilling to invest while YHOO was a conglomerate (with little to no control over investments representing as much as 43% of its net income).”
Volume has been massive in YHOO, with 51 million shares so far trading hands compared to a daily average of 18 million. The takeaway from the bid/ask surge in L2s is that traders are perhaps projecting YHOO shares could rally above the $15 mark. YHOO shares, which trade at a ttm P/E of 23, a forward P/E of 19, and a PEG ratio of 1.80, were able earlier to topple short-term resistance in the $14 region, which is currently home to the stock’s 50 day moving average.
Shares of Yahoo are higher on the session by 4.33%, currently trading at $14.22. The stock hit a HOD of $14.26 earlier in the day.