Yahoo shareholders frustrated seeking change at the top
Here's a couple of insights from the Deal Journal, part of Wall Street Journal:
Yahoo Investors Could Get Antsy
KeepingtheCrowdHappy: Generous Share Buyback, A Nice Dividend, Perhaps
Since Yahoo isn't going to accept Microsoft's $33-ashare offer, it will have to do something for shareholders quickly as they continue to suffer from the stock's 15% slide Monday.
About 279.07 million Yahoo shares traded hands Monday, compared with average daily volume of26.83 million. As Jones Day partner Robert Profusek pointed out, buyers in such numbers can't all be looking to be long-term shareholders in Yahoo, putting their faith in the company's three-year plan.
A big share buyback or a special dividend are just two options to assuage those holders; who apparently see shortterm gain in Yahoo's stock, according to Mr. Profusek. Legg Mason's Bill Miller, for one, has said he wants Yahoo to take the pain offunding a buyback, even at a lower price than the Microsoft offer.
Despite Yahoo Chief Executive Jerry Yang's apparent insistence on $37 a share for his company, it seems a little difficult to believe institutional Yahoo shareholders would have held out for that much money. Mr., Millerwho supported Yahoo's resistance against Microsoft before-groused in an interview Monday that he would have supported a deal at $35.
Yahoo can head off incensed shareholders at the pass if stockholders try to stage a coup. If Yahoo decides this week to announce the date of its annual meeting, shareholders may not have enough time to nominate new directors. According to Yahoo's bylaws, shareholders can propose a "short slate" of directors. But those bylaws require advance notice of any new candidates by 10 days after the public announcement of the annual meeting.
And a proxy fight would be difficult without wide and vocal support from Yahoo's heretofore silent shareholders. A lot of Yahoo's stock is concentrated in Microsoft-hating hands for a proxy fight to really be worth it for the Redmond, Wash., software giant: Insiders hold 18% of Yahoo's stock, according to Thomson Reuters data.
We hear shareholders are trying to encourage Microsoft to enter the fray again. But now, as always, there is a limit to how much Microsoft can do without Yahoo's help.
By: Heidi Moore
Jerry Yang, Meet the Shift Key
In an email message sent to employees on Saturday after Microsoft rescinded its $33-per-share offer for Yahoo, its chief executive Jerry Yang urged “yahoos” (as he referred to his employees) to remain focused on their work, expressed relief that the “distraction” of the bid had been removed and applauded the company’s “uniquely yahoo!” culture. One thing he didn’t do: capitalize a single letter.
Shift Key
In February, Mr. Yang sent a letter to Secretary of State Condoleezza Rice that would make any grammarian proud. But Mr. Yang is much better known for his cap-free, easy-breezy, Silicon Valley-style emails. Certainly, the tone of Saturday’s email indicated a Yahoo posture of “No deal? No big deal” (or rather, no deal no big deal). Yet Mr. Yang presumably understood that the email would leak and attract readership beyond rank-and-file employees. Early this morning, shareholders weren’t feeling as blasé about the whole matter; shares were trading at $23.03 — down nearly 20% from Friday’s closing price of $28.67.
Vogue’s editor in chief, Anna Wintour, once wrote, “When a woman has to do something important or she wants to be heard, she puts on a suit.” (Clearly Gerald Levin — the former chairman of Time Warner, who showed up to the announcement of the AOL-Time Warner merger sans tie — was not a regular reader of the fashion bible.) Similarly, some argue that when a CEO has an important message to convey to shareholders, he employs proper grammar. Or at least he should. “For an important communication that will reach shareholders, a well-crafted and appropriately capitalized and punctuated message is important,” according to JoAnne Yates, deputy dean of MIT’s Sloan School of Management — and a professor of management who has studied communication and technology in business. In an email that was perfectly capitalized and punctuated, Ms. Yates continued, “Although young employees may find the casual style attractive, more mature stockholders could interpret it as not taking the offer and their concerns seriously enough. Thus, it could increase shareholder unhappiness over his refusal of the offer.”
Emily Post, the etiquette doyenne, wrote that old-school correspondents tried to “express themselves the very best they knew how [but] to-day people don’t care a bit whether they write well or ill. Mental effort is one thing that the younger generation of the ’smart world’ seems to consider it unreasonable to ask.” However, she wrote that in the 1920s, and her opinions can be, like, totally analog. Still, as he faces shareholders, Mr. Yang might consider making the extra effort. We would suggest that Mr. Yang rustle up a “yahoo” to show him how to make a little “y” big. But we’re certain he knows the location of the “shift” key — it must be struck in order to render an exclamation point, which, in Saturday’s email, Mr. Yang did five times.
By: Katherine Rosman
Wall Street Journal; May 5, 2008
