In 2005, Yahoo invested $1 billion in Alibaba. 10 years later, its stake was worth more than $30 billion after the Chinese giant went public

Synopsis Yahoo’s Alibaba investment changed the company’s financial story. In 2005, Yahoo paid $1 billion for a 40% stake in the Chinese e-commerce company. Ten years later, that holding was worth about $30 billion. Yahoo then dropped its plan to spin off the Alibaba stake after U.S. tax authorities refused to confirm tax-free treatment. In January 2015, Yahoo planned to hand shareholders its 15% stake in Alibaba tax-free. Nine months later, the U.S. Internal Revenue Service refused to guarantee that exemption. Proceeding without an official blessing meant risking a multi billion dollar tax bill for shareholders. On December 9, 2015,…