Yahoo: Where's Icahn as Stock Dips Below $10?

Yahoo’s (YHOO) stock is struggling to stay above $10, the ad deal with Google (GOOG) is in the history books and Microsoft (MSFT) has been quick to say “Not interested.” And CEO Jerry Yang has turned into the Internet whipping boy over it.

But Kara Swisher over at AllThingsDigital poses the $64,000 question (or is it the $31-per-share question) that everyone should be asking: Where in the world are Carl Icahn and Yahoo’s board of directors? After all, they are Yang’s boss and Icahn made such a stink over taking control of that board - first with a proxy fight and then a settlement that included a few new board seats - you would think that a major shakeup would be happening.

But, nope. Investors tell Swisher that board members “have no sense of urgency or seem to feel any pressure to do anything, even though by every metric they have failed.” Another investor told her: “With all the other things going on in the economy, I have just decided to move on and write Yahoo off…but the lack of action by the board is really hard to understand.”

Ouch. Wasn’t Icahn, who attended his first official meeting as a board member back on September 24, supposed to come in and play Rambo on the company? And didn’t he bring a couple of his boys as backup - Frank J. Biondi Jr., former Universal Studios chairman and CEO and former head of Viacom, and John H. Chapple, former CEO of Nextel Partners - to help shake things up? If nothing else, give us a search deal with Microsoft, at the very least. Instead, nothing.

In many respects, Icahn’s proxy shakeup with Yahoo resembles what happened with Motorola (MOT). Icahn in 2007 launched a proxy fight for a Motorola board seat. He lost that battle, but remains a shareholder. Motorola in 2008 cut a deal to put two of Icahn’s picks on an expanded board. In other words, no one really wants an extended proxy war. The problem: Icahn’s proxy maneuvering and Motorola’s move to placate him hasn’t done anything for the stock.

Yahoo’s stock dipped as low as $9.76 Thursday - the first time since 2003 that it’s fallen under $10. Shares were up almost eight percent, closing at $11.15 in regular trading. In after hours trading, however, shares dipped again, down to $11.02. A financial timeline for Yahoo is below. (Click to enlarge)

Comments

[monkeyman:]

Seriously? We're discussing this? Look, if Yang made the deal w/ MSFT, shareholders MIGHT have been better off considering the current economic situation, but the company definitely would NOT have been, especially considering the current economic situation.

Compare the charts of YHOO, GOOG, and MSFT:

finance.yahoo.com/echa...;range=1y;compare=msft...

Both Yahoo and Google are moving comparatively, as well as MSFT. Yahoo is not like Ford or GM, it is making money and it isn't dying. Their search is actually better than Google, particularly for technical and specific searches, and they are gaining market share in the search market. There's too many people stuck on the quick buck they could have made ( which is only if they sold their shares once the buy-out happened, otherwise, they'd be losing if holding onto converted MSFT stock or reinvesting in the market ).

Icahn did not care about the shareholders, he did not care about Yahoo, or the employees of Yahoo. He cared about making a quick buck. He bought a few hundred million shares averaging in the mid 20's and hoped to get them sold to MSFT at $31 a share ( people keep quoting $33, but that was never on paper ). And Icahn is probably not losing as much, or any, money right now, because he most likely hedged all of his shares by buying PUTS on them ( did no-one notice the premiums on the stock options during that time? ).

Yahoo's stock price right now is where it is at mainly because of the economy, just like many, many other companies out on the market. The company I work for has seen it's stock price drop 70-80%, and is below the actual worth of the company, when we're meeting all of our guidelines and even raising them.

2008 Nov 13 06:58 PM

[drob:]

I call bullshit on this post. they're all moving in the same direction. massive audience tons of cash in the bank and no debt. it's an easy story that's full of bandwagen hot air. Bullish for me.

2008 Nov 13 11:15 PM

[Andrew Ster...:]

That's the problem with a speculative market envirnment do you think that most people buy stocks solely for the dividends? The US government under a reactionary ethos of greed since Reagan (I include Clinton as a crypto Republican) has encouraged all that you now see in this economic crisis:

After all it is easier to raise taxes based on baseless paper profits and speculation rather than real industry labor and efforts.

The have undermined small bussiness and entrepeneurs at the same time idiots like Palin claim to support it.

What American needs is a democratic revolution and not one by Reagan's ghosts.


On Nov 13 06:58 PM Monkeyman wrote:

> Seriously? We're discussing this? Look, if Yang made the deal w/
> MSFT, shareholders MIGHT have been better off considering the current
> economic situation, but the company definitely would NOT have been,
> especially considering the current economic situation.
>
> Compare the charts of YHOO, GOOG, and MSFT:
>
> finance.yahoo.com/echa...;range=1y;compare=msft...
>
>
> Both Yahoo and Google are moving comparatively, as well as MSFT.
> Yahoo is not like Ford or GM, it is making money and it isn't dying.
> Their search is actually better than Google, particularly for technical
> and specific searches, and they are gaining market share in the search
> market. There's too many people stuck on the quick buck they could
> have made ( which is only if they sold their shares once the buy-out
> happened, otherwise, they'd be losing if holding onto converted MSFT
> stock or reinvesting in the market ).
>
> Icahn did not care about the shareholders, he did not care about
> Yahoo, or the employees of Yahoo. He cared about making a quick buck.
> He bought a few hundred million shares averaging in the mid 20's
> and hoped to get them sold to MSFT at $31 a share ( people keep quoting
> $33, but that was never on paper ). And Icahn is probably not losing
> as much, or any, money right now, because he most likely hedged all
> of his shares by buying PUTS on them ( did no-one notice the premiums
> on the stock options during that time? ).
>
> Yahoo's stock price right now is where it is at mainly because of
> the economy, just like many, many other companies out on the market.
> The company I work for has seen it's stock price drop 70-80%, and
> is below the actual worth of the company, when we're meeting all
> of our guidelines and even raising them.

2008 Nov 13 11:26 PM