Arbitrage is nothing new in the stock market and Icahn has become very good at it. His “shareholder activism” is his way of conducting arbitrage. I just don’t understand how anyone can consider selling off a company and its components as shareholder activism. When I think shareholder activism, I think of a shareholder who actually works to improve the rights of minority shareholders in their control of a company or who works to toss a board who overcompensates the CEO.

Yahoo unleashed  its deadliest weapon “Y! Home Page” against Carl Icahn. Yahoo home page, the most visited home page on the web, has a banner that links to a page which describes Icahn as a person who don’t understand technology…

It is trying to persuade every single Yahoo shareholder to vote against Icahn’s proposal to replace Yahoo’s board. Yahoo is going straight for Icahn, attacking his credibility as an investor….

While I’m not a YHOO investor, I don’t trust Carl Icahn to provide any better leadership of the first Web portal. Yahoo has some great creativity, and if that means they suffer short-term losses to keep Microsoft from causing irreparable harm, then that’s fine.

I don’t support a Yahoo-Microsoft merger. Even if there can be some synergies made, it will result in low employee morale, poor productivity and another mass-exodus of top talent like what happened last month. Microsoft would just push their next Office 2XXX product down user’s throats forcefully and users will bail to the likes of Google or god forbid — AOL.

While the ad and their campaign is effective, I think it would be great for Yahoo to poll their users instead of only asking investors to proxy vote. This is a lot of ad real-estate without a whole lot in return. I can only imagine how many users are like “WTF?” when they land on that page.

~Joe

I do have a few problems with it. First off, the market has declined significantly since Icahn invested in many of these companies. Since January 2007 (the midpoint of the listed involvements), the S&P 500 is down over %10. If a more appropriate proxy was used, Icahn’s relative performance wouldn’t look nearly as bad. Among the public companies listed are financial service firms, real estate developers, and highly levered firms. Now, considering today’s real estate market and credit crunch, can we attribute these stock prices to Icahn’s involvement? I don’t think so! Finally, as some one mentioned before, Carl deals with mismanaged troubled companies. In hard times, these companies are hit the worst and ultimately take years to be turned around.

Another problem is that the percentages listed do not take into account any distributions made to shareholders. These include regular dividends, some very significant special dividends and spin-offs. For example, Temple Island paid a special dividend of $12.36 (41% yield) on Dec. 31, 2007. Just taking this one dividend into account, shareholders are roughly even since the time of Icahn’s involvement.

Finally, the slide gives little credit to the opportunities Icahn’s involvement gave to shareholders. Carl’s $36 buyout offer for Lear is 60% higher than today’s share price. Similarly, WCI Communities shareholder’s could have garnered $22 a share for their stock. Its worth $1.26 today!

There are many other problems with the garbage Yahoo’s employees are spewing out, but i don’t have all day to refute them.