Dan Loeb (Third Point) is one of the hedge fund industry’s real OGs, not a newcomer to shareholder activism. And so it is with great regret that I write this post, in which he becomes just the latest agitator to get involved with the unwinnable situation at Yahoo.
I am certain that they need to listen to the man but I am also certain that they will not. Carl Icahn and David Einhorn have both run their ships aground on the rocky shore of Yahoo’s not-so-fantastic island in the recent past – and all that’s changed since then is that Microsoft’s interest has waned further and the Googles and Facebooks of the world have gained even more share.
But Loeb does what Loeb is wont to do, and that is write stirring letters to accompany his 13D filings. My friend Jay at Market Folly has the whole letter, below is the part where the hedgie explains to the board that Carol Bartz’s hiring was just one of several horrendous decisions undertaken by the company and so her firing doesn’t fix the true problem. The real issue, says Loeb to the BOD, is you!
I think he’s right…
…it is evident that merely replacing the Company’s CEO – yet again – will not be enough to alter the direction of the Company. Instead, a reconstituted Board with new Directors who will bring fresh eyes, relevant industry expertise and increased investor alignment to the table is immediately necessary.
Yahoo’s website states the Company’s values, among them: “We foster collaboration while maintaining individual accountability.” It is time that certain members of this Board were held accountable for its past failures and their individual roles. Accordingly, we insist that Mr. Bostock, who championed Ms. Bartz’s hiring and led the charge against the Microsoft deal, promptly resign from the Board. We also demand that fellow Directors Arthur Kern and Vyomesh Joshi, who have stood by silently during these last five years of woeful performance, join Mr. Bostock in resignation. Finally, we can only assume that Director Susan James, the President of Tri-Valley Animal Rescue, will also resign, given her close relationship with Ms. Bartz. If she does not do so voluntarily, the Board should request her resignation as well.
My prediction: They stonewall him until he goes away and then they try to arrange some half-baked merger or sale to another content or media company.