6. Yahoo sold Alibaba
$80 billion (pre-tax)
Yahoo sold half its stake in Chinese mega-ecommerce site Alibaba back in 2012, but investors at the company probably regretted this decision when Alibaba went public on the stock exchange with a record breaking IPO, two years later. The 2012 deal that valued Yahoo’s shares at just $13, might have seemed great at the time, but just 24 months later Alibaba shares were valued at $68 each – while now they’re worth over $181.
Yahoo had initially invested $1 billion into Alibaba in 2005 and had received a 30% stake in the company, but external pressure from investors to liquidate the company’s Asian assets forced then CEO Scott Thompson to sell. Thompson may have only been Yahoo’s CEO for 180 days, but the ramifications of his dubious 2012 decision rippled on for much longer, culminating with Yahoo deciding in 2019 to sell the rest of their stake in the Chinese firm.
This time around, Yahoo execs didn’t have to hide behind their hands, as they made a respectable net return of $40 billion for their investors, though if the company had hung on to its original 30% stake, the return would have been $80 billion!