What should Yahoo do with itself? Investors have different ideas

Some of Yahoo’s other investors don’t think much of the plan the company unveiled last week to spin off Yahoo’s core business instead of its Alibaba stake. As I wrote, the plan effectively means more of the same over the next year. The company also said it did not plan to sell itself, and some long-disgruntled investors aren’t OK with that.

Canyon Capital Advisors wants Yahoo to sell now. It sent a letter to Yahoo on Friday calling for immediate action, according to the Wall Street Journal.

“Requiring shareholders to continue to wait for definitive action for another year or more — and extending the tenure of senior management — while the company evaluates this reverse-spin is simply unacceptable,” Canyon Capital wrote in its letter.

Another investor, SpringOwl Asset Management manager Eric Jackson, has long been a loud critic of CEO Marissa Mayer. He disagrees with the push for Yahoo to sell its Internet business now; he wants the company to first turn its business around by firing Mayer, and to cut costs by getting rid of worker perks — and 9,000 employees.

“The notion that some in the media – who usually have no specific knowledge about Yahoo – have recklessly put forward that Yahoo is ‘unfixable’ and that it should be simply ‘chopped up’ and handed over for nothing to private equity or strategies is insulting to all long-term public shareholders,” SpringOwl’s plan, presented in a 99-page slide presentation, states.

SpringOwl’s sentiment contrasts with that of Starboard Value, the activist investor that prompted Yahoo to announce last week that it was pursuing a different course. Starboard had first pushed for Yahoo to spin off its Alibaba stake, then called for the sale of its Internet business instead.

SpringOwl says its plan — which also includes focusing on what it says are Yahoo’s strengths, such as finance and sports — could “create an extra $30/share in value above a Starboard sell it now outcome.”

Starboard hasn’t commented publicly on the plan Yahoo unveiled last week, and has not responded to our request for comment.

According to the WSJ, Canyon Capital owns a 1.1 percent stake in Yahoo and SpringOwl an unspecified amount. Starboard owns less than a 1 percent stake.


Photo: At left, the old Yahoo billboard in Dec. 2011. (LiPo Ching/Bay Area News Group). At right, the new Yahoo billboard. (Courtesy of Yahoo) SpringOwl says the company should go back to the old billboard “to send a message that the era of Marissa Mayer is now over.”


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  • DL2014

    SpringOwl–if you cannot do it in less than 20 slides you need to refocus your presentation.