Yahoo Bows to Greenmail
Ok, technically, it isn’t greenmail, but the actions of Carl Icahn in regards to Yahoo! have been very reminiscent of the old strategy. Basically, Icahn used his fortune to buy up a large amount of Yahoo stock and then complained loudly in the media about the Yahoo board, specifically about their decision not to sell to Microsoft claiming that shareholder value was not maximized. What Icahn really means is that his short term investment has not paid off in a way that he would like and instead of admitting that perhaps he made a mistake, he blames Yahoo’s board for not selling out to Microsoft so he could squeeze a profit out of his position. But, is he right? Yahoo’s Value and Microsoft’s Offer Let’s be frank, Wall Street has never been a hyper-accurate barometer of a company’s true worth on any given day, but that inefficiency is what theoretically creates the profit potential in the markets. By finding and investing in a company that is improperly valued, you can reap the rewards when everyone else realizes that the company is wrongly valued and the price moves to make up for it. But, there in lies the rub. Everyone else …