Icahn, Billionaire Matchmaker
Microsoft could resume courtship if Yahoo takeover successful.
Microsoft, however, may come courting again, if Carl Icahn's attempt to remove Yahoo's board -- and CEO Yang in particular -- proves successful. The folks in Redmond aren't the only ones poised to back Icahn: Capital Research Global Investors, which holds 6.5% of Yahoo's shares, is "seriously considering" voting against Yahoo in the upcoming proxy fight.
News that Capital may be on his side will almost certainly embolden Icahn and move the well-known activist to push even harder for his slate of directors. There's clearly blood in the water, and I trust that a shark like Icahn will be well able to smell it.
The fact that Microsoft has expressed willingness to resume takeover negotiations with a new board provides shareholders with tremendous incentive to vote for Icahn and his slate at Yahoo's annual meeting on August 1st. The stock is in the doldrums, its current board is under fire and archrival Google (GOOG) is daily consolidating its position.
Frankly, I don't see how Jerry Yang can hope to keep his job: He and his board still haven't offered a well-defined turnaround plan, nor have they put forth an aggressive vision for the future.
And Yang's statements to Capital Research's Gordon Crawford on July 1st scarcely strengthen his credibility. For example, Yang maintained that the decision to revamp Yahoo's management structure was sound - never mind that it caused massive upheaval and mistrust within the company.
Yang also called the many executives who have recently left Yahoo's sinking ship -- including tech "rock star" Qi Lu, Yahoo Search's Vish Makhijani, and Communications and Communities head Brad Garlinghouse -- "MBA types." To dismiss such industry pathbreakers as a bunch of business-school dropouts is misleading, to say the least, particularly since Garlinghouse was the first to call for deep structural change at Yahoo over two years ago, with his famous (or infamous) "Peanut Butter Manifesto."
With Icahn's momentum building, Yahoo's stock could start to tick up. How much remains to be seen, but I wouldn't be surprised to see shares trading at $28 or $29.
Change seems to be in the air.
Yahoo closed at $23.91, up $2.56 or 11.99%.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter