Daniel Loeb’s New York-based Third Point LLC, has made almost $122 million so far on its stake in Yahoo! Inc. (YHOO, Financial) after successfully forcing Chief Executive Officer Scott Thompson to step down.
Loeb, 50, whose hedge fund owns 5.8 percent of the Web portal, has been pushing to shake up its board since September 2011, when he told the company that directors had erred in spurning a takeover bid from Microsoft Corp. Yahoo rose the most in three weeks yesterday following Thompson’s decision to leave, after Loeb flagged discrepancies in the CEO’s resume.
“We are confident this board will benefit from shareholder representation, and we are committed to working with new leadership to unlock Yahoo’s significant potential and value,” Loeb, who will join the board, said in a statement after Thompson’s departure.
While the proxy fight with Yahoo has grabbed headlines, Loeb, a former distressed debt analyst, has staged few such battles with management in recent years. Instead, most of his returns have come from buying distressed assets and companies going through restructurings or mergers. The $9 billion hedge fund, a so-called event and special situations fund, has returned 7 percent this year through May 2, with much of it coming from credit markets, said a person familiar with the fund who asked not to be named because the information is private.
About 20 percent of the portfolio is in mortgages, primarily on residential properties, Loeb said at the Skybridge Alternatives Conference last week in Las Vegas.
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Loeb, 50, whose hedge fund owns 5.8 percent of the Web portal, has been pushing to shake up its board since September 2011, when he told the company that directors had erred in spurning a takeover bid from Microsoft Corp. Yahoo rose the most in three weeks yesterday following Thompson’s decision to leave, after Loeb flagged discrepancies in the CEO’s resume.
“We are confident this board will benefit from shareholder representation, and we are committed to working with new leadership to unlock Yahoo’s significant potential and value,” Loeb, who will join the board, said in a statement after Thompson’s departure.
While the proxy fight with Yahoo has grabbed headlines, Loeb, a former distressed debt analyst, has staged few such battles with management in recent years. Instead, most of his returns have come from buying distressed assets and companies going through restructurings or mergers. The $9 billion hedge fund, a so-called event and special situations fund, has returned 7 percent this year through May 2, with much of it coming from credit markets, said a person familiar with the fund who asked not to be named because the information is private.
About 20 percent of the portfolio is in mortgages, primarily on residential properties, Loeb said at the Skybridge Alternatives Conference last week in Las Vegas.
Mortgage Bet
Mortgages have been a good place to make money this year. Returns on subprime-mortgage bonds issued in 2005 through 2007, the years with the worst loans, for example, have averaged 11 percent this year through May 10, according to Barclays Plc index data.Continue reading.
