Overhang on Hortonworks Stock: Yahoo

Big-data firm Hortonworks’ stock price has dropped by half recently, ahead of the company’s sale of stock. But the shares could come under more pressure if Yahoo sells its big chunk of Hortonworks shares.

Yahoo owns 13.8% of Hortonworks, whose technology was invented by a group of Yahoo engineers. Yahoo invested when they formed Hortonworks.

The question now is whether Yahoo’s asset sale plans, disclosed this week, could encompass its 7.5 million shares in Hortonworks. The stake is worth only about $71 to $75 million million currently. But the block is bigger than what was sold during Hortonworks’ IPO and nearly as big as its secondary offering.

Given existing stock weakness, Yahoo may choose to hold off on any sale, or to find someone to take the entire tranche. Perhaps Hortonworks needs to line up a buyer.