Yahoo board strife as Dan Loeb splits from board
nypost.com
nypost.com
http://www.thedecisiongroup.nl/wp-content/uploads/2013/03/Ca...
That's a quick overview with some more quantitative data on how the whole thing went down. It shows you what one man can do with 5% of a company.
A guy like Loeb doesn't hang around forever, just long enough to get the bulk of the upside. At a guess Loeb is impatient with Mayer's reform, it takes too long for him & his allies. Corporate raiders make their money with short term plans, they rarely sit around as long as they did here.
http://www.forbes.com/sites/nathanvardi/2013/07/22/billionai...
This whole episode seems like another hedge-fund driven money making plan - take some equity, get control of board, hire a high profile CEO, take seemingly big bets, jack up the stock price and silently exit. This yahoo stock buy-back seems to be a way to avoid the insider trading charges.
A good read on this http://online.wsj.com/article/SB1000142412788732478320457862...
It goes something like this:
- Loeb & co buy 5% of the company
- gain board seats
- force the CEO to step down
- headhunt Mayer
- Yahoo uses cash it got with selling a chunk of Alibaba to buy its own stock
- Loeb & Co unload at a huge profit
- and give up their board seats again
Point taken, but if you're referring to Loeb's firing plan that Mayer supported, the firing would have been towards roughly 2,400 - 3,600 workers, not 12,000.
From the article:
"... Loeb’s plan was to fire between 20 percent and 30 percent of Yahoo!’s roughly 12,000 workers — an idea Mayer initially supported ..."
Edit: yep, I agree it's still a lot, just wanted to point out the difference.
Yes, especially since that would mean firing every employee of the company:)
I can see that being a bad day for moral....
All joking aside, I think your point is pretty solid. Getting rid of a 1/3 of the work force was not going to send a positive message to the rest of the employee's.
As others have said, the typical corporate-raider plan is to slash costs (i.e., mass layoffs), sell off assets, create the appearance of a turnaround, capture the upside, then jump ship. Mayer was to be a figurehead in this arrangement. Whether she knew about this plan all along, or whether she put the pieces together after arriving, it sounds like she wasn't going for it. Loeb needed short-term profit (to the tune of $1B, it seems), and Mayer didn't want to be stuck holding the bag after the company was strip mined.
You don't climb to Marissa Mayer's position in life being overly concerned about "being loved." The more rational explanation is that her incentives and Loeb's incentives didn't align, so to speak.
That seems oddly put, in all the background on Mayer it doesn't ever seem like she's interested in much past the numbers and the strategy. Reasons for not slashing staffing; a) you don't attract new talent, b) you get everyone worried about how much security they've got and create conditions for an exodus, c) you create an atmosphere of despondency rather than positivity.
So yeah, that seems an awful odd thing to say. Slashing staff would have been a terrible decision that only would have had incredibly short term benefits.
You are probably right. Marissa Mayer wants to be known as a great CEO, which requires thinking long term. Loeb was mostly interested in short term profit.
The Board approved that decision, so I'm confused why there's buyer's remorse.
When someone made profit of a Billion Dollars in less than 2 years, there is more to it that what it looks outside.
Quite the sexist smear, especially without supplying any relevant evidence. I suspect her decision was a bit more complicated than that.
As part of the deal, the three directors nominated by Third Point — Harry Wilson, Michael J. Wolf and Loeb — agreed to step down on Wednesday.