Yahoo is facing pressure from investor groups against giving CEO Marissa Mayer more time to show progress on the company’s turnaround, reports the Wall Street Journal. And Canyon Capital Advisors sent a letter to Yahoo’s board on Friday urging the board to find a buyer for Yahoo’s core Internet business.
Advertisement
NY hedge fund SpringOwl Asset Management, which holds a small, unspecified stake in Yahoo, presented the company with a lengthy turnaround plan that called for Mayer’s ouster and suggested reviving the company’s old logo in a signal that her era “is now over”. She has promised to provide details of the reorganization late next month when Yahoo releases its fourth-quarter earnings.
Yahoo has not yet commented on the new turn of events.
Despite Mayer’s efforts to jumpstart Yahoo’s Internet advertising business over the past three and a half years, the company has only lost ground to Google and Facebook.
Eric Jackson says he has put forward a 99-page presentation to the company outlining a plan to slash the company’s workforce by 75% and oust the chief executive. Officials at SpringOwl could not immediately be reached for comment.
Jackson calculated that Yahoo could get about $6 billion if its core businesses were sold.
Just a few days after Yahoo’s announcement to stop its Alibaba spin-off plans, investor groups have sent out letters and proposals urging the board to either sell the company or replace the CEO. 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.
In its letter, Canyon found fault with Yahoo’s process as well as its conclusions.
Meanwhile, restless Yahoo shareholders have been questioning whether Mayer will be able to reverse a steady decline in the company’s revenue that pre-dated her arrival. Divesting the core businesses in the new strategy, however, may also carry similar tax risks, Canyon Capital wrote.
Advertisement
Canyon didn’t specify whether it would plan to take any action. The Los Angeles investment firm is one of the top 15 largest shareholders in Yahoo. He called Yahoo “dramatically overstaffed”.
