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Giving Credit Where Credit Is Due…Thank You Daniel Loeb
Posted by: Intelligent Speculator (IP Logged)
Date: July 25, 2012 06:52AM
There are a few things that I feel many people get wrong. One of them that I discuss here is the idea that simply taxing the rich is a solution to every money problem. Another one that I wanted to discuss briefly is the idea that hedge funds, activist investors and other large funds are the root of all evil and bad for the markets in general. The actual example occurred last week when Yahoo named its new CEO, Marissa Mayer, an incredible hire. The fact is that like so many others, I have been extremely critical of Yahoo over the years. Its leadership, coming from the very top was terrible, leading a company that once was a jewel into the ground slowly but surely. Worst of all was the board. You can blame Carol Bartz all day long but when CEO after CEO that not only performs poorly but reflects poorly on the company, led to massive talent losses, etc…
Something Had To Be DoneIn a situation like this, everyone was losing. Shareholders, employees, users, etc. But what could be done? It’s difficult and sometimes even possible for small investors to get together and fire a board…
In Comes Dan LoebDaniel Loeb, CEO of Third Point LLC bought a big stake in Yahoo and decided to start working on the board. He asked for board seats, for influence on who would lead, etc. It proved to be very difficult as the board had no interest and was able to fight back successfully most of his attacks.. Then he had investigators digg up the past of Scott Thompson, Yahoo’s CEO at the time and found some lies in the resume he had presented which caused huge drama. In the end, he got what he wanted as Thompson was dismissed and he got some seats on the board…
The Big CatchOf course, what good would that be if he couldn’t pull off a great leader. He ended up doing just that as reports are that he had a major role in getting newly named CEO Marissa Mayer to move to Yahoo. This marks a huge shift for Yahoo which at least has a shot of turning things around, of retaining and attracting top talent, etc. It won’t be easy but Mayer is the right person for the job according to almost anyone you can find to ask.
Big Funds Like Third Point Have A Critical RoleSuch funds or activist shareholders are able to have influence, to change things that you and I cannot do. I personally am happy both as a user and as a potential shareholder to see Yahoo being turned around in a way that I was starting to believe would never happen… Hedge funds and other large funds are the main players that have enough capacity to rectify the market like this…I think we should credit them when they do
Guru Discussed: Daniel Loeb: Current Portfolio, Stock Picks
Stocks Discussed: YHOO,
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