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Altaba Inc. Reshapes Its Portfolio

By Anders Bylund – Nov 5, 2018 at 4:20PM

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The tightly focused investment firm formerly known as Yahoo! reduced its Alibaba holdings and exited its second-largest holding entirely during the third quarter.

Altaba (AABA), the investment-management fund formerly known as Yahoo!, recently reported its results for the third quarter of 2018. All of the actual operations of Yahoo! now sit under Verizon's corporate umbrella.

Altaba itself is a highly focused investment manager whose core holdings consist of shares in Alibaba (BABA 4.55%), though the company also manages a small basket of intellectual property rights that Verizon didn't want to include in its $4.5 billion buyout deal.

Watchmaker working on a complicated clockwork system.

Altaba is putting the pieces together in a new way. Image source: Getty Images.

By the numbers

Investment

Fair Value as of Sept. 30, 2018

Fair Value as of Sept. 30, 2017

Year-Over-Year Change

Alibaba

$44.7 billion

$66.2 billion

(32%)

Yahoo! Japan

$0

$9.6 billion

N/A

Total Altaba Investments

$62.4 billion

$84.8 billion

(26%)

Data source: Altaba SEC filings.

What's new with Altaba?

Altaba owns 11% of China-based e-commerce giant Alibaba. Until very recently, the company also held a significant stake in Yahoo! Japan, an online search and marketing service in Japan. Over the last three months, Altaba sold its entire Yahoo! Japan stake and traded some of its Alibaba holdings in order to buy back 24% of its own shares. Before that move, Altaba's Alibaba holdings had represented nearly 15% of the Chinese target company's shares.

Three months ago, 91% of Altaba's total investment portfolio consisted of Alibaba shares. The financial reshuffling reduced Alibaba's presence to 72% of Altaba's total investments.

At the same time, Altaba's share buybacks drove an unusually wide wedge between the two stock charts. Alibaba's stock, usually joined at the hip to Altaba as far as direct shareholder returns are concerned, took a 17% plunge since the end of August due to the Trump administration's tariff-wielding trade conflict with Beijing. Altaba dampened the impact to a 12.2% drop over the same period.

Beyond the flagship holding, Altaba also holds a smaller portfolio of corporate and government bonds, certificates of deposit, and other assorted financial instruments. The total market value of these holdings added up to $15.7 billion at the end of the third quarter, up from $6.4 billion three months earlier.

Anders Bylund owns shares of Alibaba Group Holding. The Motley Fool recommends Altaba Inc and Verizon Communications. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Alibaba Group Holding Limited Stock Quote
Alibaba Group Holding Limited
BABA
$84.11 (4.55%) $3.66
Altaba Stock Quote
Altaba
AABA

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