For nearly two years, I’ve been engaged in an activist campaign aimed at improving the performance of Yahoo. No more. I sold my fund’s stake last month. The risk/reward ratio of continuing to hold the stock had become too high.
To anyone who says that it’s inconsequential that Yahoo understated the level of shareholder dissatisfaction by more than half thanks to a “tabulation error” by its proxy counter, Broadridge, I say: You couldn’t be more wrong. This incident will have ramifications in the coming weeks for the composition of Yahoo’s board.
Now that Microsoft has withdrawn its unsolicited buyout bid, Yahoo investors who are outraged and seeking to extract some pain may gear up to engage in several actions, ranging from gunning for a board seat to voting “against” re-electing the company’s slate, say proxy solicitors and M&A attorneys.
Eric Jackson, a Yahoo shareholder activist, falls into both camps. On Sunday, Jackson said he’s planning to launch a “withhold vote” campaign and hopes to run for a board seat when Yahoo holds its next annual shareholders meeting.
“I’m definitely interested in throwing my hat in the ring, if it’s allowable, and plan to talk to other shareholders,” said Jackson, founder of hedge fund Ironfire Capital. “And whether it’s me or other people who get elected, that’s fine. Yahoo’s current board definitely needs new blood.”
If you’re following the twists and turns of Microsoft’s hostile bid for Yahoo, you can’t escape one name that keeps popping up in the media: Eric Jackson. As an activist shareholder in Yahoo, he has become the voice of the opposition, calling on Yahoo to accept Microsoft’s takeover bid–or any reasonable bid. Last year, he was instrumental in raising a ruckus online over Yahoo’s poor stock performance, and helped get Yahoo CEO Terry Semel ousted.
But what’s amazing about Jackson is that unlike the big-name activist shareholders such as Carl Icahn and Daniel Loeb who have huge war chests to buy up stock, Jackson is a small fish. He only owns 96 shares of Yahoo stock. Where Jackson has innovated is in using the tools of social media to gather support from other shareholders and get the attention of the media to make his case for corporate change.
I hadn’t expected Terry Semel to step down on Monday. Less than a week before, after Yahoo’s annual meeting in Santa Clara, Calif., he approached me. He was quite affable, considering that we had had a pointed exchange during the earlier Q&A session and that I led a group of 100 shareholders owning 2 million [...]
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