Now that Yahoo blew it in their negotiations to sell to Microsoft, they are going to be prey to all sorts of predators. And the Valley now gets to witness the kind of corporate warfare that is usually reserved for the “old” economy – a takeover battle via a proxy contest. I recently advised an ousted CEO recently in an attempt at a proxy contest to take over a public Valley company and it can be a challenging process. But corporate America has very few other mechanisms to bring in new leadership when management hides behind the various defenses that corporate law allows them.
While I think that Yahoo needs new leadership, I am pretty taken aback by the nominees chosen by Icahn. Lucian Bebchuk, of course, is a very widely respected law professor (and justly so) but how much does he know about the gritty day to day operations of a public company – does he want to pour over corporate financial statements every quarter in order to ask management meaningful questions?? I doubt it. And, of course, he knows even less about the internet as far as I know.
The other nominees seem like “marquee” names (Mark Cuban??) aimed at garnering publicity for the proxy contest (which is, indeed, critical for its success) but do any of these people want to put in the time and effort it is going to take to turn Yahoo around? The CEO search alone could take months. So once the research groups and proxy advisory firms get to it I think there is likely to be only a lukewarm reaction to this alternative.
Sit back and enjoy the fight – if you own Yahoo stock it likely is going to be a bit of a roller coaster ride as shares rise and fall on the backs of speculation on the outcome.