May 7, 2012
As High-Noon Deadline Passes, Third Point Fires Back At Yahoo Board
Michael Harper for RedOrbit.com
Last week, Yahoo´s largest investor Third Point LLC called out the new CEO Scott Thompson for allegedly lying about his education. Thompson, who has only been in his position since January, has been saying he has a Bachelors degree in computer science for years.
Dan Loeb, who heads the hedge fund, discovered this was not true, and asked for further investigation by the board of directors. The board answered Loeb by saying they would look into his claims, but also said not having a computer science degree does not make Thompson a bad CEO.
Loeb responded with a second letter, this time with an ultimatum: Fire Thompson by noon on Monday or they will take further action.
Loeb´s deadline has passed and, true to his word, Third Point has begun the process under Delaware Law to obtain books and records regarding Thompson´s vetting process.
In the letter, Third Point calls for cooperation and transparency, saying,
“Third Point believes that Yahoo shareholders and employees will be best served if the Board accepts responsibility quickly for this latest debacle. If the Directors are truly interested in "working in a constructive manner with Third Point," they should provide answers promptly. We believe that this internal investigation by this Board must not be conducted behind a veil of secrecy and shareholders deserve total transparency.”
Should Third Point have their way, they expect to closely inspect Yahoo´s internal records for evidence to further their fight to gain seats on Yahoo´s board of directors. Particularly, Third Point wishes:
• To investigate wrongdoing or possible mismanagement by Yahoo!'s management and/or any member(s) or committee(s) of its Board of Directors (the "Board") in connection with the hiring of Scott Thompson as the Chief Executive Officer of the Company and his appointment to the Board;
• To investigate wrongdoing or possible mismanagement by Yahoo!'s management and/or any member(s) or committee(s) of its Board in connection with the appointment of Peter Liguori, John Hayes, Thomas McInerney, Maynard Webb, Jr. and Fred Amoroso to the Yahoo! board rather than the nominees proposed by Third Point;
• To investigate wrongdoing or possible mismanagement by Yahoo!'s management and/or any member(s) or committee(s) of its Board in connection with the statements by Yahoo! on the afternoon of May 3 that the false filings about Mr. Thompson's educational background were "inadvertent."
• To determine whether Scott Thompson, Patti Hart, Peter Liguori, John Hayes, Maynard Webb, Jr., Fred Amoroso, and Thomas McInerney are suitable to serve as directors of Yahoo!;
• To facilitate communications with other stockholders concerning the matters identified in paragraphs 1 through 4 above, in connection with a proxy contest to replace the current board of directors with nominees proposed by Third Point.
Before this kerfuffle began, most were concerned with Thompson´s performance as he laid off thousands of employees earlier in the year. Also involved in this scandal is Patti Hart, chair of the committee to find Thompson who also lied about her education and degrees.
At 1 PM Eastern, an hour after the noon deadline, shares of YHOO were trading at $15.43.