Third Point Demands Yahoo Name Interim CEO
In its latest salvo to the embattled tech company Yahoo, hedge-fund manager Daniel Loeb demanded again that CEO Scott Thompson resign immediately and suggested that he be replaced by the company’s CFO or global head of media on an interim basis.
Speaking publicly for the first time since last fall about his ongoing proxy fight with Yahoo, Loeb called the company “bloated” and “not focused,” but added that the tech giant is a “great business” capable of being turned around.
Loeb was part of a panel at the SALT alternative-investment conference in Las Vegas, where he and other money managers, including Reservoir Capital CEO Daniel Stern and Starwood Capital chief Barry Sternlicht, discussed the ethics of resume-padding — a concern that has arisen with Thompson, who overstated his educational credentials — and the current state of investing.
On the panel, a rare public appearance for the Third Point activist, Loeb attacked the recent management of Yahoo, which he said “had missed every important trend on the Internet: social, local, you name it.”
Loeb, who owns more than 5% of the tech company’s shares, has been criticizing Yahoo in writing for months.
Wednesday morning, days after revelations that Thompson claimed to have received joint undergraduate degrees when in fact he had only earned one, Loeb insisted that the Yahoo CEO should resign immediately and be replaced with an interim chief.
“Character and integrity matter,” said Loeb at the Las Vegas gathering, amid nods from his fellow panelists.
Yahoo needs major director and management changes, Loeb said. “From the board level,” he added, “what we really want to see is better process and kind of a rebuilding of the whole firm’s culture and the way they do business.”
Still, he said, Yahoo has much to offer. For instance, its Asian assets, Alibaba and Yahoo Japan, have great value, he said, and should be monetized.
But there’s no rush, Loeb pointed out. In saying that, he added “that doesn’t mean liquidate everything tomorrow.”
Loeb, in a strongly worded letter issued earlier Wednesday, argued that the Yahoo board’s ongoing probe into the hiring of Thompson — who was recently found to have padded his educational credentials — had become “farcical” and that the company must put a prompt end to the “carnage” that has taken place. (Click here to read the letter)
“The evidence shows that [Thompson] has been using false credentials for years,” Loeb wrote, and Thompson’s “classic ‘I’m sorry you feel that way’ non-apology” was in fact not an effort to take responsibility for his behavior.
"Third Point has over $1 billion invested in Yahoo! and we take no joy in witnessing this carnage," Loeb wrote. "This Board’s unchecked value destruction must stop once and for all."
Loeb suggested that either Yahoo CFO Tim Morse or global head of media Ross Levinsohn be appointed to replace Thompson as interim CEO, and demanded that board member Patti Hart, who led the search for Thompson, pay back the $15,000 in remuneration she received for her efforts.
A Yahoo spokeswoman could not immediately be reached for comment.
On Tuesday, Yahoo said it had set up a committee "to conduct a thorough review" of Thompson's credentials, and a published report said Hart would not seek re-election to the Yahoo board.
By CNBC's Kate Kelly
Follow Kate Kelly on Twitter: @katekellycnbc