| After the threat of a proxy fight, Yahoo has decided to increase the
size of its board and add Carl Icahn and his nominations. Mr. Icahn
was originally calling for the complete change of slate- however all
but one member of the Yahoo board were allowed to stay. It is left to
be seen whether Mr. Icahn will have any positive effects on the board.
Yahoo has suggested that it would be willing to sell itself to
Microsoft at $33/share, the price that they rejected just before
Microsoft walked away from the deal. Microsoft it seems is not taking
the bait. They have stated that they are no longer interested in
buying the whole company, instead have made an offer for only the
search engine portion. Originally Mr. Icahn had planned to win a seat
on the board and force the board to accept the Microsoft offer, making
a nice profit for himself after the sale; Only now he is left in the
uncomfortable position of buying a stock that is trading for $21.67,
for $25- and what is worse is after the commotion around the proxy
battle dies down, and a Microsoft acquisition seems out of reach the
stock price should settle lower still. Mr. Icahn maybe a genius at
turning a quick profit by changing the board- but his record as a
manager has been less than perfect. It must be noted that despite Mr.
Icahn's attentions Blockbuster stock does not seem to be performing as
expected- in fact it continues to fall. He has managed to cut costs
with the new CEO he appointed, however despite positive earnings,
investors are hesitant to put money down. It wasn't long before Mr.
Icahn lost interest in Blockbuster and become obsessed with Yahoo, and
it won't be long before he sets his eyes on a new target. It seems,
Yahoo might be doomed to be just another flavor of the week now that
it has lost the Microsoft bid. |
