Yahoo owns 39 percent of Chinese-based internet group Alibaba, so its announcement that it knew nothing about Alibaba’s transfer of its Alipay third-party online payment platform left investors feeling uneasy.
Though Yahoo’s market cap is $21.6 billion, about half of that, $10 billion, comes from its investments in the Alibaba Group. The idea that the Chinese group had transferred one of its prime assets to a separate entity controlled by Alibaba CEO Jack Ma without first consulting had Yahoo’s investors scrambling to get rid of their stocks. In just one week, share prices for Yahoo stock dropped 14 percent, and the Business Journal suggested that the Board may be getting ready to replace Yahoo CEO Carol Bartz.
Bartz and Ma have never gotten along, and the rumor was that he decided to transfer Alipay to a separate company he controls was intended to irritate the already irascible Yahoo CEO. He quickly denied this though, and said that he was simply following Chinese law, which prohibits any foreign companies from owning online payment services.
Plummeting stock prices have forced all the parties to take a step back. In a joint statement issued on Sunday by Yahoo, Alibaba, and the third partner, Softbank, the companies announced that all the parties, “are engaged in and committed to productive negotiations to resolve the outstanding issues related to Alipay in a manner that serves the interests of all shareholders as soon as possible.”
Now it is up to the market to respond.
Things To Do: May 16-20 
