On October 21 at 5 PM EDT, Yahoo! Inc. (NASDAQ:YHOO) will reveal its earnings that might be the only anchor Marissa Mayer has in the company. This is only from the theoretical standpoint, because currently there’s no actual threat. Moreover, according to Bloomberg, there’re tight relationships between the members of the board. So, Starboard Value LP might find some difficulties in knocking out Yahoo! Inc. (NASDAQ:YHOO)’s board the same way it did with Darden Restaurants, Inc. (NYSE:DRI).
The strategy employed by the activist investor seems quite straightforward. It opts for financial austerity in order to maintain profitability and short –term profit maximization through spinoffs. It works almost as a retailer of used cars, so when it finds a lemon it tries to repair the aesthetic traits to get a nice look, then if it cannot be mended throughout, the company will be sold by parts. In the case of Darden Restaurants, Inc. (NYSE:DRI), Starboard Value LP managed to change all the board through the influence of almost 9% of total shares, which is about 8.2 million.
However, fighting on Marissa’s territory will be much more difficult as Yahoo! Inc. (NASDAQ:YHOO)’s board has been carefully picked by the current chief executive officer, fact confirmed by Bloomberg. David Filo, Yahoo! Inc. (NASDAQ:YHOO) co-founder and Max Levchin, board chair, aren’t expected to rock the boat. The rest have joined Team Marissa to help the unfortunate CEO overturn the company’s faith. Starboard Value LP hasn’t disclosed the stake in the search engine developer, but it’s gaining support from smaller institutional investors and might end up pushing either an overturn of the management board either a strict compliance with its wishes.
Darden Restaurants, Inc. (NYSE:DRI) is seeing some upside as its price of almost $48.2 is more than 2% higher than yesterday’s value. So, it may be a good idea for Yahoo! Inc. (NASDAQ:YHOO) to take into consideration the advice brought by the aggressive activist investor.
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