One of Yahoo’s largest investors has slammed the company’s board of directors and demanded changes, in a fiery letter published by the American Securities & Exchange Commission (SEC).
Daniel Loeb, CEO of investment company Third Point, says Yahoo’s directors have made decisions that have ‘directly harmed the company and resulted in a stock price far below the company’s intrinsic value’.
In particular, Loeb criticises the board’s hiring of Carol Bartz as CEO in January 2009. Bartz was fired earlier this week due to poor performance.
"It is now widely accepted that the board made a serious misjudgement in approving the hiring of Carol Bartz as Yahoo’s Chief Executive Officer, given her inexperience in the consumer-oriented internet space.
"Although we are pleased that the board has terminated Bartz’ employment, we fail to understand why this decision was so long in coming given her abysmal performance over the last two and a half years.
"During this period, Ms Bartz’ poor decision-making and communication skills publicly alienated the company’s highly respected Asian partners, as well as its shareholders, sell-side analysts, bloggers, customers and employees.”
Loeb also picks on the board’s decision to turn down a US$31 per share bid from Microsoft in 2008.
"This mistake is all the more frustrating given Yahoo’s current depressed stock price of [US]$12.61 per share – far below the company’s intrinsic value, which we currently place in excess of [US]$20 per share.”
Loeb says he is confident the company can bounce back, provided the board is willing to make radical changes.
"Hidden by Yahoo's senior management drama is a franchise benefitting daily from tremendous investment in resources and new platforms successfully built by Yahoo's corps of talented, committed engineers, product development team and salespeople."
Go here to read the full letter.