Could Icahn win a proxy fight at Yahoo?
Two of my favorite topics this spring… Carl Icahn and Yahoo. So who would have thunk this…
Reports today indicate that Carl Icahn is considering a proxy fight vs. Yahoo’s board. The deadline is Thursday (May 15) to nominate candidates — no problem for King Carl as he has a stable of ready and waiting executives at every turn.
The question isn’t: Will Icahn try? Regardless of whether he wins or loses the vote, there is plenty of money to be made by Icahn by boosting Yahoo’s stock toward $31+ from its current position. And with Yahoo’s shareholder vote to be held in less than 50 days from now on July 3rd, it can be realized quickly, creating a hefty annualized return.
The real question that we should ask is: Can Icahn succeed? In a battle of wits, Icahn wins hands down. In a battle of who loves shareholders most, Icahn wins again. In a battle of proper governance, Icahn wins that too.
Having Yahoo co-founder David Filo (who isn’t even on the board) negotiate with Microsoft was a giant abdication of duties for Yahoo’s board. That’s like Joe Torre using the bat boy to pinch hit in a playoff game. Regardless of the directors’ stance on the Microsoft offer, it is cause enough to demand resignation of all independent directors.
Some people claim that Icahn just wants to make a buck. So what? All investors do. If Yang & Co. really believe Yahoo’s stock is worth $38/share, why have they not been buying shares by the truckload? At $19/share, they could have doubled their money and given even more money to Stanford.
Heck, even buying at $26/share today, Yang and Filo could become almost as rich as those Google guys. That is, if they really believe the company to be worth what they claim.
