Shareholder report lays out why Alibaba should buy Yahoo

Investment heavyweights on both coasts are pushing for Alibaba’s Jack Ma to buy Yahoo.

The push for Ma, Alibaba’s founder, to buy the massive IT giant is outlined in a report from Yahoo shareholder Eric Jackson, who owns Ironfire Capital. Jackson said such a deal would save Alibaba billions if Ma buys Yahoo as a tax-free way of reclaiming shares from his own company.

Jackson declined to tell VentureBeat what percentage of shares in Yahoo he owned. But he said the deal would be a win for Ma, Yahoo, and also Softbank, which also owns shares in Yahoo.

“In my case, what’s unique about Yahoo is that the stock has more than doubled since Marissa Mayer came aboard. The argument I made was that there would be more value for Yahoo if Alibaba or Softbank bought Yahoo,” Jackson said.

Jackson, who has never met Ma, said he believed the deal was in the best interest for Yahoo’s future.

“There is an arbitrage opportunity here,” Jackson added.

Ironfire Capital is a hedgefund that also invests in early stage tech startups.

Alibaba is slated to launch its much hyped IPO sometime in the fall. It is expected to be one of the biggest IPO’s in history. For its part, Yahoo owns a 24 percent stake in Alibaba. The Economist last year valued the China-based Internet portal at between $55 billion and all of the way up to $120 billion.

As for the other investors who are interested in pushing Alibaba to buy Yahoo, speculation has centered on Yahoo shareholders Janus Capital, JAT Capital, and DE Shaw. Yahoo has a market valuation of $36 billion. Yahoo has about 800 million active users.

Jackson did not reply to an email for comment. A Yahoo spokesperson declined to comment.

Floating a report like Jackson’s is a common tactic by shareholder investors as one way they can promote their agendas regarding the company in question.

Yahoo has been busy lately — and on an acquisition binge.

Earlier this week, the Sunnyvale-based IT stalwart bought mobile analytic standout Flurry in a cash and stock deal valued at around $240 million. Yahoo chief Marissa Mayer has stated publicly that it’s now a mobile-focused company. And the Flurry deal has made that clear.

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