Yahoo under fire; frustrated shareholders want Marissa Mayer out

She gave birth to twin girls Thursday, the day after unveiling plans to hatch a new company to control Yahoo’s Internet business. She and her husband, Zachary Bogue, have a 3-year-old son, Macallister.

Ms Mayer hoped to placate investors with last week’s announcement of a revised spin-off, but the company’s shares have slid 6pc since then.

The demands from SpringOwl Asset Management and Canyon Capital Advisors reflect shareholders’ frustration with Mayer’s inability to snap the company out of a financial funk after three-and-half years on the job. The breakup is an alternate to another tax-dodging plan that Yahoo had been working on throughout this year: spinning off its $32 billion stake in China’s Alibaba Group into a new company called Aabaco. Yahoo executives have said they believe the spin-off will provide more transparency on the operations of its advertising and search businesses, which will increase their value. A more disruptive plan came from Eric Jackson, managing director at SpringOwl, an investment firm with a minority share in Yahoo.

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 Capital’s strongly worded letter to fellow investors proclaimed that waiting another year to break Yahoo up from its Alibaba holdings is unacceptable.

Officials at SpringOwl could not immediately be reached for comment. His firm also wants to see board members replaced with people who have more tech and mobile experience.

– End employee perks, such as free food, which cost the company $450 million over the past four years.

The investor is calling for new management, led by an executive with strength in operations, and suggesting that a strategic partner buy a stake in Yahoo through a private investment in public equity, or PIPE, deal and act as an adviser on the tax issues tied to its stakes in Alibaba and Yahoo Japan.

Ms. Mayer on Wednesday said she would announce a more detailed reorganization plan on the fourth-quarter earnings call next month.

SpringOwl Asset Management LLC, another investor, proposed a plan to reduce the number of Yahoo’s employees. However, last week, Chairman Maynard Webb said the board has not approved a sale process but it has “a fiduciary duty to entertain any offers”.

“She’s got to admit that she has not done a lot to generate value thus far”, said Brett Harriss, a research analyst at Gabelli & Co.

To help make his point, Jackson goes over everything Mayer has blown money on, from failed acquisitions to lavish parties and sponsorships.