Icahn Win Triggers Yahoo (YHOO) Severance Bonanza. So When Will Carl Give Up and Sell?
(Yahoo's executives can't just quit and take the package. But our understanding is executives can resign for "good reason," which leaves a lot of wiggle room. And, if nothing else, the package will make it more expensive for Carl's new CEO to fire a lot of Yahoos, which we suspect would be one of his or her first moves.)
As some readers have pointed out, it's not our vote that matters is Icahn v Yahoo, but the votes of huge shareholders such as Gordon Crawford (Capital Research and Management) and Bill Miller (Legg Mason). After blasting Jerry Yang and Yahoo's board for blowing the Microsoft deal, Gordon has been mum. Bill, meanwhile, has been trimming his position. If we had to guess, we imagine that Gordon and Bill are likely thinking along the same lines we are. Namely:
- Carl Icahn has no real plan for Yahoo other than selling to Microsoft
- This weak negotiating position would likely lead to a takeout in the high-$20s, if that.
Carl says he wants to recruit a new CEO. We think Jerry's actually doing an okay job playing the crappy hand he was dealt, so we're going to need more detail than "fire Jerry" before we get excited about that. Carl also says if Microsoft won't buy the company, he'll run to Google and do a search deal. This is exactly what Yahoo is trying to do now, so, again, we don't see the need to hire Carl's team (at great cost) to do it.
Bottom line? We think Carl Icahn is going to lose this proxy fight. We think he'll probably soon conclude the same thing (if he hasn't already), which means he'll likely want to start unwinding some of his position (which is--or was--mostly options). If Carl bails, so will his hedge fund friends--Boone Pickens, Dan Loeb, John Paulson, et al. This will put even more pressure on the stock.
See Also:
More Icahn Insults For Yahoo Reveal That Carl Has Little More To Say
Icahn to Yahoo Chair: You're The Liar, and Here's My Plan
Sorry, Carl, We're Not Voting For Your Yahoo Proxy Plan
"If he wins the proxy contest, this will trigger the massive severance-bonus plan Yahoo put in place to fight off Microsoft."
Seems like the post title is poorly worded. (I guess you mean a YAHOO proxy loss even though you start by mentioning Icahn and introduce the post by reversing the role's of construction.) My initial thought was that win or lose a proxy vote triggers the plan -- which seemed like very new and very significant info.
1) If Icahn wins control of the board via a proxy fight then the severance poison pill kicks in and Yahoo explodes in the lap of the new owner. Microsoft reached the same conclusion and walked (for other reasons also)
2) Icahn, having concluded as much, is now fighting to overturn the severance grenade prior to August 1. Unless the board/management overstepped its bounds in approving it, he will lose. The odds of him getting decision by August 1 are low in any event.
3) Thus, there is no deal and the smart money (Bill Miller) is selling. The hedge fund dudes are likely to follow suit very quickly.
4) Gordon Crawford will ride YHOO down bitching about Jerry all the way to $17 then sell.
5) Buy YHOO at $15 when the dumb money is out and just before MSFT returns with a $22 offer.
Rumors that he would launch a proxy fight pushed up the stock. Now, if he's quiet, he can trim his position and make a quick buck. However, if things played out well, he might have forced Yahoo to sell to Microsoft and make a larger quick buck.
I don't see much downside for Icahn here unless he does something amateurish, but I think Henry is right that Yahoo has made themselves relatively untenable with regards to a takeover through proxy battles. This leaves Icahn in a position to get in, make a fuss, and get out. I believe he made a similar profit with GM.
On the flip side of the coin, Yahoo may also have tanked their own stock price in the process. If Icahn leaves, how many people are confident about their current valuation?
Can you explain to me what he did on the BEA-Oracle deal, and maybe how he thought he was going to replicate that similar situation with YHOO-MSFT?
Additional 5 points for using it in the headline.
Score +10 for Blodget.
Icahn wants us to believe that Yang destroyed the company by way of the retention plan. But that's not true; Icahn is just upset because the retention plan is in his way. Yang may not be the best CEO, but he built this company from the ground up and deserves a ton of credit. The retention plan is absolutely necessary for retaining employees when multiple parties (first Microsoft, then Icahn) are trying to destroy it and the employees are left wondering if they have jobs. If it weren't for Ballmer and Icahn's unsolicited "business deals", Yahoo would not have needed the retention plan!
Icahn's only goal is to make money for himself. Yang actually built something that touches billions of people around the world in useful ways. When did Icahn ever build anything?
Icahn sucks.
Too, if I remember correctly, he's net poitive at approximately $25.81 or so.
1) GOOG deal. This keeps their hand in search. Increases CF by $500MM to less than $1B. At 10x, worth say $7B to market cap.
2) MSFT deal ends role in search but gives them $20B. Doesn't suck and does exceed $7B. But search is gone.
Purple blood dude is going to choose door #1. It keeps YHOO in the search game and buys more time.
Of course, Purple Blood dude has regulator feedback that we don't have. Also GOOG may not want to do a deal ex risk of MSFT buyout. Why prop up your #2 competitor if #3 can't buy it?
http://googyhoo.blogspot.com/2008/06/heading-to-delaware-court.html
I'm pretty sure Icahn was aware of this before getting into the proxy fight. So I don't agree that he would back out and start selling because of this reason.
Icahn is quite aware that MSFT needs YHOO desperately and willing to bet on it. The latest hitwise numbers show that MSFT is down to ~5% of search market and approaching ASK.com in terms of share. The rate at which MSFT search share is going down and looking at its trajectory, it doesn't seem like ~0% is too far from here. They need to do something and desperate times call for desperate measures.
Icahn's options are dated ~nov2010. So I don't think he has an urgencey to sell out and he indicated on CNBC that he is willing to wait it out. Sooner or later MSFT has to come back and make an offer that YHOO can't refuse. Since its almost impossible for Icahn to win, and may not be in his own best interest due to the triggering of severance package, I think he will negotiate with YHOO board to get couple of seats (1 or 2). He might even win those without having to negotiate with YHOO board. This will give him enough leverage to force a negotiation with MSFT in good faith or seriously explore other deals to improve YHOO stock price.
Also after the proxy fight, current YHOO board will be in a better negotiating position, because their board seats would be secure for a year. This would mean that MSFT might end up having to pay ~$35/share with substantial valuation guarantees. What this does to MSFT stock is anybody's guess, but ~$25 is not out of question.
Maybe Icahn's over. Julian Robertson retired. Icahn could too. El Tigre was real smart money. Icahn is a leech.
Come on guys, you've gotta know by now that he sold those shares weeks ago to pay for the cost of the 50 million options.
He's too smart to have waited this long to get out of his 9 or 10 million shares.
The man was gambling on the upside with no risk on the downside.
Jerry and Sue have had ample time to revive Yahoo. They've managed to diminish one of the Internet's great brands, and have done nothing but rearrange deck chairs as the ship buffets in Google's wake.
Or buy all of it for $34-33 ps & sell off the Asian assets = severence price possibly?
Or can MSFT absorb the extra 2 bil & make a go of it anyway?
Or bring News corp in as a partner - how powerful would they be?!
It seems there wouldn't be this much media coverage if the offer price of this deal wouldn't generate an roi.
After I reach my first billion dollar level I pledge to hire a personal valet to attend to any nose hair that finds its way to the front part of my nostrils.
Come on Carl.
You've said yourself that search is a natural monopoly. Why would you bet on a crummy second rate player when you can bet on the company that is establishing the monopoly and which is massively undervalued compared to ALL of its Internet brethren?
sohbet
chat
chat
sohbet
sohbet
chat
adtech ile reklam 2.0 dönemi başlıyor ve Trkycmhrytllbtpydrklcktr r10.net seo yarışması
özcan sarıca ile kurtlar vadisi pusu 3.sezon 1.seo yarışması
kurumsal danismanlik
sesli sohbet
gizli kamera
güvenlik kamerası
cilt bakım ürünleri
DVD Ripper for Mac
Mac Video Converter