What do you do when you own roughly 6% of a multibillion dollar company - the largest stake outside the company – and have decades of experience in working with different businesses, but when you nominate four people to its board the only response you get is a brief phone call?
If you are Third Point founder and manager Dan Loeb, you go to the mattress. Enough is enough, especially in this case. Loeb has been battling Yahoo's board since the third quarter 2011 when he initiated his fund's position in the company. Originally, the issue was Board Chairman Roy Bostock and Founder Jerry Yang. Loeb was no fan of their antics and eventually called for their resignations as a concerned shareholder. After months of trying to provoke the change, Loeb won out. Yang resigned in January while Bostock is slated to retire after the annual shareholder's meeting, along with several others. Unfortunately, that was not enough to end Loeb's problems with Yahoo's board.
Recently, Loeb made the move to nominate himself and three others to the board – Maeva Group CEO Harry Wilson, former MTV Networks President Michael Wolf and former NBC Universal CEO Jeff Zucker. Together, Loeb thinks that the four of them will be able to help Yahoo become the best company it can be. Loeb also explained that he wanted to develop a planning committee with the Yahoo board to help it maximize its resources to compete in the current environment.
Loeb explained all this in a letter addressed to CEO Scott Thompson and filed with the SEC. In that letter, Loeb also expressed his desire to have these issues resolved – one way or another. He explained: "When we spoke on February 17, I reiterated our interest in avoiding a drawn-out proxy contest, and working constructively with you and the remaining Board members to promptly recruit Silicon Valley leaders with strong engineering, product and technology credentials to join us on the Board (many of whom have expressed interest in joining once the looming proxy contest was completed). The intended result: ensure Yahoo! maintains its place as a premier internet company by forcefully addressing the immediate strategic and operational challenges it faces."
"With such a reconstituted Board in place, a powerful strategic planning committee would promptly but thoughtfully map out a plan to take full advantage of the Company’s valuable assets and stop its painful decay. Perhaps naively, I believed that you and the Company would recognize the value to this approach, and we could join forces immediately in this regard."
Only time will tell how Thompson responds to Loeb's very earnest request, but one thing is certain – things at Yahoo are going to change one way or another.