Calling the decision ‘illogical’, major Yahoo shareholder Daniel Loeb, who has invested about $1 billion in the giant Internet company, said late Wednesday Yahoo was living in an Alice In Wonderland world after the firm denied him a seat in the board.
In a strongly worded letter to Yahoo CEO Scott Thompson, as reported this morning by the Associated Press in San Francisco, Loeb called attention to his years as a big Yahoo Investor through his hedge fund Third Point, which now holds 5.8% of the company’s shares.
Loeb explained that his substantial stake in Yahoo gives him the incentive in a big way to do what is right for the company’s shareholders than Yahoo’s other board directors.
The reaction from Loeb followed the appointment by Yahoo earlier this week of three new members of its board, who were not investors in the company. Loeb had earlier suggested several names as candidates for the three board positions, himself among them, but his recommendations just passed through.
In a reply to Loeb’s letter, Yahoo CEO Thompson said the firm is cognizant of Third Point’s holdings in Yahoo, but declared that Loeb’s share be viewed as an incentive for Loeb to propose ideas for short-term gains, rather than for strategy in the long run.
Loeb called the reply ‘illogical’ and implied that Yahoo’s position is more suitable to an Alice In Wonderland world.
Industry observers this morning said the disappointed shareholder was not likely to abandon his fight for more control, noting that Loeb still has some ammunition in his belt to force Yahoo out of what he termed shoddy corporate governance.
Yahoo, an Internet pioneer and one of the biggest Web companies, has been experiencing corporate problems, which had held down its Wall Street share value to $15.32, eleven cents lower than the previous day.
Source: Yahoo! News