Icahn Has Two Days to Breathe Life into Micro-hoo

May 14, 2008 7:36 AM ETMSFT, AABA1 Comment
Seth Gilbert profile picture
Seth Gilbert

With a stock price down to the mid 20s and Microsoft (MSFT) saying they’ve “been there, done that” and aren’t coming back, there are more than a few Yahoo (YHOO) shareholders second guessing whether Yahoo management overplayed their hand. They’re wondering if holding out was a mistake. For billionaire investor Carl Icahn, their mistake may be his opportunity.

Reports are circulating that Icahn has bought as much as 50 million shares of Yahoo stock in the past week, an amount equal to about 3.5% of the company. There are rumors he’s buying more too. CNBC, in fact, reported Tuesday that Icahn may be gearing up for a proxy fight aimed at seating a new board and resuscitating Microsoft’s now scuttled takeover bid.

The prospect brings to mind the old adage that “it takes money to make money.” It also triggers the unspoken tenet behind that turn of phrase: if you have enough money you don’t have to wait for deals to happen, you can actively create them.

If Icahn is buying, it’s safe to bet he’s not following a passive strategy. There’s no wait and see. He’s a shareholder known to bring the fight. This would be a move right out of the playbook of Oracle (ORCL) vs. BEA, another deal Icahn left his fingerprints on. It would be a move to buy at $25 and then with a new board, sell to Microsoft for the previously offered $31 to $33. Not a bad spread, if it can be arranged.

The key is, for such an Icahn gambit to work, he’ll have to build a support group of other dissident shareholders. It will take the sum of their votes, and his, to nominate and elect enough new board members to shift the majority vote to their favor.

It’s not an

This article was written by

Seth Gilbert profile picture
Seth Gilbert is the founder and editor of Metue.com (http://www.Metue.com/), a business blog and website focused on the convergence of media, entertainment and technology. From music, to movies, from gaming, to publishing, the site covers the affairs of private and public companies. It’s a survey of things just starting and things winding down, a look at significant transactions and events that could have an impact tomorrow. Metue is as much about connecting the dots as it is about reporting them. Prior to starting Metue, Seth held senior business development, strategy and product marketing roles for Silicon Valley start-ups and in the Venture Capital industry. In addition to Metue, Seth provides strategy and business development consulting services. He can be contacted through the pages on Metue.com (http://www.Metue.com/).

Recommended For You

Comments (1)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.