Charted: The value of Yahoo’s Alibaba stake since announcing its spinoff plans

This is what I get for waiting.
This is what I get for waiting.
Image: AP Photo/Eric Risberg
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Yahoo is set to report its earnings today (Oct. 20) after US markets close, and investors are hungry for more details on the progress of its Alibaba stake spinoff.

In September, the Sunnyvale, California, company was dealt a setback when the US Internal Revenue Service declined to issue a private-letter ruling on whether a proposed restructuring would allow Yahoo to offload its 384 million shares of Alibaba without incurring any taxes. But that hasn’t deterred Yahoo. In a filing with the US Securities and Exchange Commission, Yahoo said it would continue with the spinoff while hoping to avoid a multibillion-dollar tax bill.

Of course, when the company first described its tax-free spinoff plans in January, the value of its stake in the Chinese e-commerce giant was worth quite a bit more. At the start of the year, Yahoo’s Alibaba shares were worth about $40 billion, but they’ve declined 30% year to date to $28 billion, thanks largely to China’s financial crisis.