Icahn Swims Against the Tide, Increases Yahoo Holdings

Nov.28.08 | About: Yahoo! Inc. (YHOO)

Billionaire investor and Yahoo Inc. (NASDAQ:YHOO) board member Carl Icahn has increased his holdings in the Sunnyvale, California-based Web Portal by adding 6.8 million shares to his position for about $65 million. According to a filing with the Securities and Exchange Commission, various Icahn entities purchased, between 11/24 and 11/26, 6.8 million shares of Yahoo at an average price of $9.92. This brings Icahn’s total stake in the Internet company to 75.6 million shares or 5.4%. At Wednesday’s (11/26) closing price of mid-$10 levels, Icahn’s stake was worth approximately $800 million.

Icahn agreed to join Yahoo’s board of directors in July after waging a proxy battle against Yahoo’s management to reach a deal to sell all or part of the company to Microsoft (NASDAQ:MSFT). After the agreement was reached he stressed again his believe that the sale of the whole company or the sale of its search business “in the right transaction must be given full consideration.” At the time, Mr. Icahn owned 68.7 million Yahoo shares, or 4.98% of the company’s common stock. Negotiations between Yahoo and Microsoft ultimately ended with the software giant withdrawing its buyout offer.

Recently, Yahoo reported unimpressive third-quarter results. Many analysts remain unenthusiastic about the company’s prospects, implying that renewed action by Icahn could take place.

Yahoo’s continued poor performance has caused disappointed investors to dump their Yahoo shares.

Disclosure: None