Yahoo investors mount pressure for turnaround

Jackson said he believes his plan will unlock billions of dollars of value in Yahoo, ultimately taking the stock price from $35 to $113, helped by Yahoo’s stakes in Alibaba and Yahoo Japan. The investor wrote that Yahoo needs to start selling parts of its business off now or risk a further decline in the worth of the company.

Yahoo scrapped the Alibaba spinoff after another shareholder, Starboard Value, threatened an attempt to overthrow the board if the company stuck to that plan.

“I disagree with this notion that Yahoo can’t be fixed”, said Eric Jackson, managing director of SpringOwl, which has $300 million in assets under management, including an unspecified stake in Yahoo.

SpringOwl told AFP that it sent a copy of the 99-page presentation to Yahoo before making it public.

According to a person familiar with the matter, Mayer has the support of Yahoo’s board and will be given time to work through the new plan to carry out the reverse spin. He predicted that with cost-cutting and profitability improvements, the core businesses could even amount to at least $24 billion. He hopes to pressure Yahoo’s board publicly, using his 22,000 Twitter followers, but will also consider waging a proxy fight.

A separate challenge is emerging from investors who want Yahoo to sell now.

Canyon Capital Advisors LLC, which owns about 1.1 percent or 10 million shares in Yahoo, said in a letter dated December 11 that the company should pursue a sale of the whole company or its various assets as soon as possible.

“Requiring shareholders to continue to wait for definitive action for another year or more-and extending the tenure of senior management-while the company evaluates this reverse-spin is simply unacceptable”, the investor wrote in its letter. He also noted that Starboard has incentive to see a quick sale since it acquired half its $200 million stake in Yahoo during the third quarter, “likely when the stock crashed below $28/share”. The firm is particularly concerned that Yahoo didn’t include “any clear details in terms of analysis, process or timing” with its announcement.

Starboard Value and other shareholders are unlikely to share the board’s patience and have have written letters to the Yahoo board, voicing their opposition to the company’s current path.

Canyon’s call reflects a previous campaign by activist investor Starboard which in November urged Yahoo to find a buyer for its company.

Yahoo Inc. didn’t immediately respond to requests for comment about the critiques from SpringOwl and Canyon Capital. Last week, Yahoo Chairman Maynard Webb said the company’s board “has complete confidence in the management team and the leadership” of the company. In addition, his firm also says Yahoo should stop spending lavishly on free food for employees.