Even after the messy firing of embattled CEO Carol Baratz in September and other management shuffles, criticism of the board’s recognized inability to engineer a strategic turnaround continued. Third Point, a hedge fund run by Daniel Loeb, disclosed a 5.1% stake in the online media company last fall and called for the resignation of co-founder Jerry Yang and other board members: “From the failed Microsoft (NASDQ:MSFT) sale negotiations [rebuffed $44.6 billion, or $31 a share, buyout offer in 2008], to a subsequent bungled and disappointing search deal with Microsoft, through a series of misguided CEO selections… this Board’s failures have destroyed value for all Yahoo stakeholders,” excoriated Loeb in a letter addressed to the board on September 8. “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.”
Loeb opined further that Yahoo was an iconic asset, which led by a reconstituted board and management team could result in a rapidly appreciating stock to a targeted value of up to $23 a share. Notwithstanding all the noise generated by Loeb, given the fractured board’s inability to ever reach consensus on a unified business strategy – such as, spinning off its 43 percent stake in Chinese internet provider Alibaba or rebooting its advertising and online shopping businesses – Yahoo’s long-suffering stockholders won’t find much deal-making value in their stockings come Christmas.
Read more: the "SEC’s Naughty list" at 24/7 Wall Street
David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.