Carl Icahn and activist investor movement

Carl Icahn is again in the news. This time is about the Yahoo (Nasdaq:YHOO) shareholder proxy fight. Basically Carl bought a bunch Yahoo shares after the Microsoft deal fell through, and he is trying to remove the current Yahoo board, and make the sale to Microsoft. Intelligent observers may say did not Microsoft walked away already? What if MSFT do not take the bait? Well, I think Mr. Icahn has plan B when he has this in mind. If the MSFT deal do not work, and it looks like Google is neither interested nor in a position to buy the whole piece of Yahoo (anti trust issue), Carl can cut Yahoo in pieces and sell it to different companies. So for instance, sell Alibaba stake to eBay (I use this just as an example, not that I know eBay is interested in Alibaba), sell Yahoo Finance to Sina,…anyway you got the idea.

Carl’s idea is not new, but the proxy fights by activist shareholders are getting more and more popular. Yesterday another Internet pioneer CNET was sold to the traditional media giant CBS corp, amid the pressure of CNET’s activist shareholder (a hedge fund). The sale of Datascope (Nasdaq: DSCP) patient monitoring business to Mindray (NYSE:MR) was also done after the pressure from hedge fund. CBS 60 minutes did an interview with Ichan, and I think the interview explain the proxy fight process well (see the video below).Being small investor, I would not follow Mr. Icahn blindly. I thought about buying Yahoo after the deal fell apart. But I think at the price $22 to $27, Yahoo is still expensive.

By the way, my friend StrengthTrader has a Chinese article about Carl Icahn’s war on
Yahoo.

(Earthquake update) Rescue worker still pulled out survivors from rubble, 4 days after quake.

Leave a comment