Yesterday was like Christmas for securities lawyers and activist Yahoo shareholders. Microsoft CEO Steve Ballmer walked away from his $40-plus billion offer on Saturday; shares plunged on Monday; and Yahoo CEO Jerry Yang was widely criticized for acting out of self interest -- and not on the behalf of shareholders.
"Right now, the way we see it, the board's failure to control Jerry
Yang has cost shareholders billions of dollars in value," says Mark
Lebovich, lead partner at Bernstein Litowitz Berger & Grossmann, who is in the process of amending a class action lawsuit against Yahoo and its board members. "If there's some master plan that's going to create greater shareholder value than Microsoft may have offered, the market hasn't seen it. And we'd like to see it."
We can't deny that Yahoo shareholders have reason to be angry, given the stock's dismal performance and the company's uncertain future. But just who are these so-called "activist shareholders"? From what we can gather, they're a bunch of opportunistic vultures.
Eric Jackson, one of the most widely quoted of the bunch, started "Plan B," an unfortunately named grassroots group of 140 shareholders who are trying to shake up Yahoo's board.
Jackson, 35, isn't a longtime Yahoo shareholder, though. Nor has he ever managed a publicly traded company. During the last dot-com bubble, he was in school. In fact, it's hard to see what practical experience he has that could be useful to Yahoo management, other than his academic career. (He says he has a PhD from Columbia Business School.)
His financial interest in Yahoo is minimal -- he only bought a measly 96 shares in December 2006, and he waited less than a month to form Plan B.
"I bought the shares because I thought I'd need to have some skin in the game to get things started," Jackson says. "I followed the company for awhile, and I was just surprised that there were no shareholders pushing the company to make changes."
His real stake in Yahoo is his professional reputation, which essentially hinges on his criticism of the company. In the meantime, he has built his career around "activist investments." Ironfire Capital, the firm he heads, is running campaigns against
14 public companies.
Photo: Flickr/Yodel Anecdotal
See Also:
- Did Bill Miller Blow the Microsoft-Yahoo Deal?
- Microsoft Walks! Says Yahoo Demands Don't Make Sense
- Microsoft, Yahoo Reportedly in Friendly Talks
- Microsoft CFO Explains Why the Stock Sucks: Yahoo
- Our Tip to Mr. Ballmer: Forget Yahoo, Buy AOL
- What's Next for Microsoft-Yahoo?
- Running the Numbers on a Possible Yahoo/Microsoft Merger
