UPDATE: SunTrust Robinson Humphrey Reiterates on Yahoo! as Stock Expands Balance Sheet with Convert Issue

In a report published Wednesday, SunTrust Robinson Humphrey analyst Robert S. Peck reiterated a Neutral rating on Yahoo! YHOO, but removed the $34.00 price target. In the report, SunTrust Robinson Humphrey noted, “Yahoo! announced after the close that it is offering a $1b convert that will add $800m of cash to its balance sheet ($200m will be used to buy shares from buyers of the convert). We think this is a wise move for the company as the shares are up 74% this year and interest rates remain low. The company's cash will now be ~$4 vs. $3.2b at the end of 3Q. In addition, the company will expand its buyback authorization to $5b, as last quarter's $1.7b of buybacks depleted the prior authorization to just ~$200m. The authorization needed to be raised, should the company see Alibaba have its IPO and the company delivers on its past practices of returning cash to shareholders. Yahoo!'s 9.5% stake (208m shares) in Alibaba could be worth ~$10b pre tax ($6b after tax) on a possible $100b IPO valuation for Alibaba.” Yahoo! closed on Tuesday at $34.63.