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Shares in Yahoo! Inc. took a nosedive May 11 after the company disclosed in its Form 10-Q that ownership of Alibaba Group's online-payment business, Alipay, had been shifted to a privately held Chinese company mostly owned by Alibaba's CEO, Jack Ma.
Yahoo, which owned a 43% stake in Alibaba as of March 31, saw its stock price fall 7.28% on May 11 to close at $17.20 per share. By early trading May 13, shares in Yahoo were trading at $16.22.
Yahoo and Softbank Corp., another major Alibaba stakeholder, did not learn of the transfer until March 31, though it occurred in August 2010, Yahoo said May 12 in a statement.
"Yahoo! continues to work closely with Alibaba and Softbank to protect economic value for all interested parties," the company said. "We believe ongoing negotiations among all of the parties provide the best opportunity to achieve an outcome in the best interest of all stakeholders."
Stifel Nicolaus analyst Jordan Rohan wrote in a May 11 research report that he valued Alipay at $2 billion, noting that the Chinese online payment service had 550 million registered users at the end of 2010, compared with eBay Inc.'s PayPal online payment service's 94.4 million registered users at the end of the year.
"In our opinion, the impact is...