A few days ago, my take was that Jerry Yang and Yahoo had made a mistake not accepting the $47bn offer from Microsoft. But walking out suddenly from the Yahoo deal obviously was the best tactical move for Microsoft to ultimately reach its goal !
10 days after Microsoft dropped out, famous investor Carl Icahn is now vowing to oust Yahoo Inc.'s board of directors for "irresponsible" and "unconscionable" actions (his words) that led Microsoft Corp. to withdraw a $47.5 billion offer to buy the Internet pionneer.
Icahn has so far invested more than $1.3 billion to acquire 59 million Yahoo shares, ie a roughly 4 percent stake in the Sunnyvale-based company, and he's likely to double that investment, which gives him some leverage.
I'm convinced Yahoo's fate should change during summer. Not only its market position is by no mean sustainable as it is, but many shareholders, led by Icahn, feel that enough is enough and that the Yahoo Board has not worked in their best interest. There are lousy CEOs but there are also lousy Boards.
For his 4 and a half year tenure as Yahoo's CEO, Terry Semel received a total compensation of $258M, not including the same amount in non-exercised options, while creating no value.
Investment-wise, I feel it's a smart move by Carl Icahn : if successful, he could earn a few hundred millions bucks in a short time frame.
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