Activist investors want tepid Yahoo! to reboot crashed Marissa Mayer Activist investors Starboard have joined calls for a management overhaul at Yahoo!, arguing the company is hemorrhaging cash under its leadership. In a letter to the company's board (PDF), the investors note that the past year has been "extremely frustrating" for shareholders, which has seen a "continued downward spiral of the …
"The company must 'deeply reduce unnecessary costs', flog its unprofitable businesses, and overhaul its incentives and compensation programs, it said."
i.e.: "Screw the employees; WE'RE the only ones who should get paid!"
* No offense intended to Vultures, Central or otherwise!
It's not that those of us that choose to invest some of our hard-earned in companies think we're the only ones that should get paid, but more that we think we are entitled to a good return on our money - otherwise why take the risk of investing in a company at all?
Do I need to point out what happens to those same employees if no-one invests - I thought not.
Investing in companies is like playing cards in Vegas. It's got slightly better odds but it is definitely a game of skill AND luck. The CEO of yahoo is not a muppet, she came from an extremely successful company and was one of the founders of that company.
She knows how to make things work. Perhaps the fact that multiple CEOs have been unable to stop Yahoos decline says something more about their market positioning and brand rather than the actual product.
This sort of change takes many years to happen perhaps they, the investors, should withdraw their money if they expect it to be a steady income stream before market and product realignment are complete.
"To feague a horse; to put ginger up a horse’s fundament, and formerly, as it is said, a live eel, to make him lively and carry his tail well"
First off, I think El Reg needs to anticipate a call from the Animal Welfare League for resurrecting this concept. Moving on...
First we have to consider the source. Starboard Value LP was founded in 2011. It has not exactly performed well since. Most recent quarter ending 30 September 2015 it was up approximately 1%. When investing in such stocks as DRI (down 12% since 30 September) that is to be expected. My suspicion is some of this noise is to distract from lackluster performance.
Yahoo was not a sound investment for anyone looking for an immediate profit when Mayer became CEO in 2012. There were two choices at the time: strip the company down for sale, including the 24% stake in Alibaba, or try and turn it around over a minimum of five years. The global economy still being significantly stalled in 2012 drove the choice to trying a turnaround.
Anyone who remained invested in Yahoo at that point should have been aware this was a boom/bust proposition. Either the turnaround was going to succeed or there was going to be a fire sale when it failed. My opinion is that the outcome is yet to be determined. Changing management yet again will only increase the chances of a fire sale. Place your bets and take your chances, but do not try and feague the horse with a stick of dynamite when it still has a chance to win the race.
Sometimes, the purpose or utility of a company has come to an end. Yahoo! may be there. If so, then, well...the company possibly needs to be ended, and stakeholders would prefer that to be done in a way that makes them filthy rich. Which, I can't blame them for, I'd rather end up filthy rich rather than just filthy.
The tough part is that the people that work for the company, which is currently providing them with their livelihood...they won't end up filthy rich if the company ends, and they depend on the money coming in from working at said company to maintain their current lifestyle. And I can't imagine that anyone wants to unemploy themselves.
So, attempt to reinvent yourself, company. Sadly, your odds probably aren't a lot better than a from scratch startup at succeeding at that new venture(s). Sure, you probably have actual money coming in to spend on making yourself a new company, but you're public, and that means you've got a lot of cooks in your kitchen that want results now, not tomorrow or next decade...
All of this was supposed to be fixed by removing all those pesky remote workers who sap productivity and morale. Whatever happened, Mrs. M.?
To be fair, not sure what can be done at this point, or several years back already. A quick glance at their homepage, which I hadn't visited for years, and I find it looks very much like a 2010-vintage trashy 'news' site.
I don't think they can even get $ from outbrain, taboola or the like, because their main page already looks like it was composed by those fine fellows. Even has a sponsored story for "speeding up your slow computer".
I think the investors should have really pushed back a few years back when its founder nixed a selloff. Now the horse isn't so much out the door as over the cliff a few miles away and well covered with flies. Not sure Mrs Mayer could have done any better (or worse). After all, Alta Vista got put out of biz by Google et all and it was, IMHO, a much better resource than yahoo ever was for finding things.
"...hedge fund SpringOwl Asset Management, [...] sent a 99-page letter to the company's CEO Marissa Mayer arguing for her to be ousted"
If I understand this correctly, SpringOwl Ass. Man. sent a letter to... Marissa Mayer, urging her to fire... Marissa Mayer?
Good luck with that.
But if they did send such a letter, then SpringOwl Ass. Man. would seem to be exactly the kind of people that you'd have expected to invest in Yahoo in the first place.
Hey Marissa, show some more of your leadership genius. Maybe 11 degrees will work better.
Seriously, any investor that got dicknapped by Marissa deserves all they get. Any differences she made were short term and investors should have grabbed the money and run.
When she cut the sort of employee benefits that good employees like, it was obvious all the good employees would leave. That leaves you with the dregs that can't get a job elsewhere. Yup, sure there would have been some who rode it out for stock options, but they've have cashed those in as soon as they could.
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