See the Bloomberg article linked elsewhere in the comments. In short: 0) the spinout will also run some (non-important) businness and so won't be a pure holdin

See the Bloomberg article linked elsewhere in the comments. In short: 0) the spinout will also run some (non-important) businness and so won't be a pure holding company 1) the spinout is less likely to sell the Alibaba shares and squander out the proceeds, 2) eventually Alibaba itself could buy out the spinout, and then it would have no need to sell its own shares. Surely shareholders would still have to pay capital gain taxes when the spinned-out company gets acquired at a premium, but presumably at a rate better than the 40% Yahoo would have to pay.