Yahoo Shareholder Slams Jerry Yang and Demands Two Board Seats
Two years after Carl Icahn ended a proxy battle with Yahoo, the Internet company has another fight on its hands, this time with a fund that owns a 5 percent stake in Yahoo.
Daniel Loeb, CEO of an investment entity called Third Point, fired off a harshly worded letter to Yahoo that called into question the competence of co-founder Jerry Yang. He also demanded that Third Point be awarded two board seats at Yahoo, either via the creation of new ones or by getting rid of Yang and chairman Roy Bostock.
In particular, Loeb is curious about Yahoo's previously disclosed efforts to find a buyer or partner or other kind of relationship or strategy to boost the languishing stock price. Yang is part of a nine-person committee spearheading that effort, but he's also rumored to be interested in taking Yahoo private, and this apparently confuses Loeb.
"At a bare minimum, Mr. Yang must declare whether he is a buyer or a seller -- he cannot be both," he writes in his lengthy letter to Yahoo's board of directors.
Loeb also wasn't impressed with the way Yang attempted unsuccessfully to sell Yahoo to Microsoft three years for more than twice what Yahoo's market capitalization is today.
"Given his ineptitude in dealing with the Microsoft negotiations to purchase the company in 2008," Loeb writes, "it is now clear that he is simply not aligned with shareholders."
Yahoo on Friday issued a statement backing Yang that reads, in part, "News reports based on rumor and speculation are just that. The board's comprehensive strategic review process is still underway, with a wide range of options under active consideration. We can assure all Yahoo shareholders that whatever the outcome of the strategic review process may be, it will serve the best interests of all the company's shareholders."