Some notes have been trickling out this afternoon in defense of Yahoo! (YHOO) after the steep decline in its stock following disclosures last night there was a change in the structure of the Alibaba Group Ltd. venture in which it holds a 43% stake.

Piper Jaffray, Caris & Co. and Goldman Sachs have all defended the stock. I have the Goldman Sachs note in front of me at the moment.

Goldman’s James Mitchell reiterated a Neutral rating on the shares, writing that the changeover of ownership of “Alipay,” the payment arm of Alibaba, an ecommerce company, has little impact on Yahoo!’s valuation, in his opinion, given that he already valued Alipay at zero for Yahoo! That’s because there are “much lower merchant discount rates in China compared to the West. He also says he sees no similar risk to Yahoo!’s stake in Taobao, which is worth about $3.50 per Yahoo! share.

“We expected such a restructuring in order for Alipay to obtain a local payment processing license (which requires local ownership), though the nature and timing of the disclosure (in a 10-Q) surprised us,” writes Mitchell. “We assume the acquiring entity will ultimately compensate Yahoo! and Softbank in some fashion.”

Yahoo! shares are now down $1.34, or 7%, at $17.21.

Article courtesy of Tech Trader Daily

Earlier this morning, Raj Rajaratnam was found guilty on 9 counts on insider trading and 5 counts of conspiracy. He is probably not in the best of moods right now, as he may be going away to a place that doesn’t give you extra mayo on the side of your tuna sandwich, for nearly 20 years. But there is some good news, which is that someone will most likely make a movie about this whole thing. To give producers a jump start, we will start the casting process now.

The following roles need to be filled:

* Raj Rajaratnam- The Guy

* Danielle Chiesi- The Girl who reels in tips with her fishnet stockings

* Anil Kumar- The McKinsey guy who faithfully provided Raj with inside info

* Rajat Gupta- The Goldman board member

* Bob Moffat- The IBM exec who cried over Danielle Chiesi in public at least three time, and then promised to never open his heart to a woman other than his wife again

* The Dwarf- The little person who was hired by Raj as an April Fool’s Day joke, and introduced to employees as a new analyst brought on to cover “small-cap” stocks

* Keryn Limmer- The Galleon analyst who Raj paid $5,000 to be tased when execs from stun-gun maker Taser International came to make a pitch in 2005 (“Employees gathered around as two people propped up trader Keryn Limmer at the elbows and another person fired the weapon. Ms. Limmer’s legs buckled beneath her from the shock”)

* The Idiot Analyst- The Galleon Group analyst who was called an ‘idiot’ by Raj for questioning the hedge fund manager’s inside information about Goldman Sachs, given to him by a board member

* The Spandex Analyst- The Galleon junior female analyst Raj told to buy a spandex outfit from Lululemon, wear it to the firm’s morning meeting and “walk back and forth on top of the conference table” while Raj commented that “few consumers would pay so much money for the expensive outfit in a recession”

Article courtesy of Dealbreaker

$$$ NY Fed ‘Pleased‘ With Sale of Ex-AIG Subprime Bonds (WSJ)

$$$ At around 10 last night, Lady Gaga arrived in a glowing egg positioned on top of a cart filled with cakes and macaroons. Escorted by brawny men in sleeveless Roman tunics, the cart rolled past hedge-fund founders Dan Och, David Einhorn, Steven A. Cohen, Ken Griffin, and more than 4,000 others gathered in the Jacob K. Javits Convention Center for the Robin Hood Foundation benefit. Soon “the Gaga,” as emcee Brian Williams called her, emerged onstage wearing a cream outfit that exposed her midriff. “I’d like to thank all the rich people for donating tonight,” she said. “And when I say rich, I mean rich in spirit.” (Bloomberg)

$$$ Goldman Sachs Cuts First-Quarter Estimate for Possible Legal Losses by 21% (Bloomberg)

$$$ Goldman Goes Long US Government Debt (CNBC)

$$$ JPMorgan denies gouging Lehman in $8.6 billion fight (Reuters)

$$$ Bank of America Billions in Losses at Stake on Moynihan Outlook (Bloomberg)

$$$ Charity to auction lunch date with Warren Buffett (Reuters)

$$$ Junk bond yields hit record lows (FT)

$$$ Whistleblowers in muniland (FT Alphaville)

$$$ Ireland to Impose Levy on Pension Funds to Finance Jobs Plan (Bloomberg)

http://www.bloomberg.com/news/2011-05-10/ireland-to-impose-levy-on-pension-funds-to-finance-jobs-plan.html

$$$ Microsoft-Skype Deal May Upset AT&T, Verizon Relations (Bloomberg)

$$$ Google launches music service without labels (Reuters)

$$$ Japan Scraps Plan for New Nuclear Plants (NYT)

$$$ Donald Trump’s poll numbers collapse (Politico)

$$$ Northwestern University

Article courtesy of Dealbreaker

Goldman said that it’s been notified of the probe via “oral advisement,” or the action known as “words exiting a human’s mouth,” to the layman.

In its quarterly filing with the Securities and Exchange Commission Tuesday, Goldman said that the agency’s staff has orally advised it that it intends to recommend the agency bring “aiding and abetting, civil fraud and supervision-related charges” against Goldman Sachs Execution & Clearing.

The CFTC, the filing said, is basing these charges on allegations Goldman knew, or should have known, that its broker-dealer client’s subaccounts at Goldman were accounts belonging to customers of the broker-dealer and not the broker-dealer’s own accounts.

[WSJ]

Article courtesy of Dealbreaker

Marc Mezvinsky is back from his ski trip and ready to work, if you’re interested in investing or putting in a res.

The source, who heard the information firsthand from Chelsea’s hubby, tells us Mezvinsky has “decided to spearhead his own private [hedge] fund with two other guys,” and ideally will launch the company in the next few months. To help get the job done, the source adds that Mezvinksy will team up with “two guys from Goldman Sachs,” the investment banking mammoth where he worked from 2002 to 2008 (before joining 3G).

According to the source, since leaving 3G Capital, Mezvinsky — the son of Pennsylvania Congresswoman Marjorie Margolies-Mezvinsky and disgraced Iowa Congressman Ed Mezvinsky (who served five years in federal prison for fraud) — has stayed busy by “consulting on private projects,” hitting the gym and escorting his doting wife to charity events.

[NYDN]

Article courtesy of Dealbreaker

The Microsoft (MSFT) -for-Skype rumor is gaining ground.

GigaOm’s Om Malik earlier today offered a recap of rumors that “have been swirling around Skype” for a week now, with Reuters having written that Google (GOOG) and Facebook were looking for a deal with the Internet calling firm, or maybe looking to buy it. Malik wrote that Microsoft “has entered the mix.”

And tonight, The Wall Street Journal’s Anupreeta Das and Nick Wingfield are writing that Microsoft is “close to a deal to buy Internet phone company Skype Technologies SA for more than $7 billion,” citing anonymous sources.

Negotiations have been “wrapping up” this evening, they write.

eBay (EBAY), which bought Skype for $2.6 billion in October of 2005,  later sold the company in November of 2005 for $1.9 billion in cash, for a net gain of $1.4 billion, and a 30% stake in Skype to private equity shop Silver Lake, the Canada Pension Plan Investment Board, and venture firm Andreessen Horowitz in a leveraged buyout.

eBay listed its 30% stake at $620 million in last year’s 10-K filing, implying a value of roughly $2 billion for Skype.

Obviously, then, a Microsoft bid of this size would represent not just a premium t0 recent valuation, but multiples of the 2009 buyout, if it happens.

Some people thought eBay was crazy when they paid $2.6 billion in 2005, and there were also stories from Silicon Valley that some Skype backers at the time thought they should have asked for much more.

Microsoft ended the fiscal Q3 in March with $50 billion of cash, cash equivalents and short-term investments, and long-term debt of $12 billion.

Remember that bidding for Skype has been a spectator sport for some time. Back in August of last year, TechCrunch reported Cisco Systems (CSCO) was interested, which was then refuted by sources, Eric reported the next day.

Malik himself proposed back in September that Facebook should buy the company, and that it might have to pay $7 billion to $7.5 billion.

Remember, too, that Skype filed for a $100 million public offering last August, led by Goldman Sachs, JP Morgan, and Morgan Stanley, which has since been amended multiple times. The latest version, filed last month, lists $860 million in revenue for all of 2010. That would represent 20% revenue growth from the $719 million the company reported in 2009.

Effectively, then, Microsoft would be paying on the order of seven or so times trailing revenue. Skype had a pre-tax loss of $57 million in 2010, according to the filing.

The prospectus from April also records $690 million in long-term debt that was racked up to facilitate the leveraged buyout in 2009, against $142.5 million in cash and equivalents.

Microsoft shares ended the day down 4 cents at $25.83.

Article courtesy of Tech Trader Daily

Popular flash sales site Gilt Groupe announced today that it has raised another $138 million in funding, and is now reportedly valued at around $1 billion.

The round exceeds earlier reports that pegged the New York City company’s new funding between $80 and $100 million. Japanese telecom Softbank invested $62.5 million, while separately contributing enough funding to Gilt Groupe Japan to take a 50 percent stake in the company. The remaining $75.5 million came from previous investors General Atlantic and Matrix Partners, as well as new backers Goldman Sachs, New Enterprise Associates, Draper Fisher Jurvetson Growth, Pinnacle Ventures, TriplePoint Capital, and Eastward Capital.

Gilt Groupe says it now has more than 3.5 million users. It’s pretty obvious by now that there’s a lot of cash flowing into online shopping (deals sites Groupon and LivingSocial have both raised big new rounds), but Gilt Groupe made its name by focusing on luxury products and services, something that has carried over when it expands beyond flash sales, for example into Groupon-like deals at Gilt City.

In an interview with the Wall Street Journal, chief executive Kevin Ryan said the company will bring in $500 million in revenue for the year ending in June. And while he said there are no specific plans to go public, this will probably be Gilt Groupe’s final round of funding.

Companies: Gilt Groupe, Softbank

People: Kevin Ryan

Article courtesy of VentureBeat » deals

Goldman Sachs Chairman and Chief Executive Lloyd Blankfein said he is not stepping down, despite media reports that he has plans to resign. Blankfein spoke to reporters after Goldman’s annual meeting in Jersey City, N.J., on Friday…One well known shareholder, Evelyn Y. Davis, suggested at the start of the meeting that Blankfein should step down once the session was over. When asked by reporters why he wanted to stay, Blankfein quipped, “And give up all this?” [Reuters]

Article courtesy of Dealbreaker

“I want people to know I have nothing against you personally,” Davis, 81, tells C.E.O. Lloyd C. Blankfein. “And you are not a bad looking guy.” She then gives Mr. Blankfein a free copy of her newsletter Highlights and Lowlights…Davis [later asks] Mr. Blankfein if his wife Laura was present. [Dealbook, earlier]

Article courtesy of Dealbreaker

“I would not at this moment say that any financial services firm, especially Goldman, who was preeminent during that whole time, is out of the woods on this,” said Peter Sorrentino, a senior portfolio manager at Huntington Asset Advisors in Cincinnati, which manages $14.8 billion, including almost 135,000 Goldman Sachs shares. “At this juncture, given the magnitude of what happened, I don’t know what the time window is…I still think we’re one headline away from this stock getting clobbered.” [Bloomberg]

Article courtesy of Dealbreaker