Billion-Dollar Bonus: Alibaba Allows Yahoo to Sell 68 Million Fewer Shares in IPO

As I reported might happen, Yahoo said it “requested and Alibaba Group agreed to an amendment to the share repurchase agreement that reduces the maximum number of shares that Yahoo is required to sell in connection with Alibaba’s initial public offering from 208 million shares to 140 million shares.”

That’s 68 million fewer shares that could be worth billion of dollars for the company coffers now that Yahoo gets to hold onto them. Half of what it will sell, said Yahoo in a statement, will go back to its shareholders.

Yahoo execs might see this as a victory and it is, of a sort. I call it buying time.

And those execs have definitely succeeded in being an Asian investment company — through no effort of their own — but not, as it turns out, as a thriving Internet concern.

In fact, the Chinese Internet giant just gave Yahoo another reprieve and boosted its stock once again, simply by letting it ride on its financial coattails even as the Silicon Valley company’s core performance continues to be, well, crappy.

And crappy it was for CEO Marissa Mayer in Yahoo’s second quarter with revenue down and earnings flat. It is hard in an ever-expanding Web market to do quite this badly. Thus, Mayer did not even try to pretend that the results were other than poor.

Yahoo sales were $1.04 billion, excluding traffic acquisition costs, with earnings per share of 37 cents. Analysts had expected revenue to be $1.08 billion and earnings to be 38 cents.

“Our top priority is revenue growth and by that measure, we are not satisfied with our Q2 results. “I believe we can and will do better moving forward.”

As I have said over and over, she should send flowers to Alibaba’s co-founder Jack Ma and also Yahoo co-founder Jerry Yang for making the investment many moons ago.

This article originally appeared on Recode.net.

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