Loeb Questions Board's Credibility in Escalating Yahoo Fight

At the very least, the latest salvo fromhedge fund manager Dan Loeb aimed at Yahoo’s board is reflective of a fight that is getting increasingly nasty.

Daniel Loeb, founder and CEO of Third Point.
Jacob Kepler | Bloomberg | Getty Images
Daniel Loeb, founder and CEO of Third Point.

But at its logical extreme, Loeb’s charge that Yahoo CEO Scott Thompson and director Patty Hart purposefully overstated their educational backgrounds, could create doubts about their character and ethics.

That, of course, is what Mr. Loeb, whose hedge fund owns 5.8 percent of Yahoo shares , is hoping for as he fights to seat four nominees on the company’s board of directors.

Thompson has overstated his education by adding a computer science major where none existed — which Yahoo has confirmed, calling it an "inadvertent error" — but he's far from the first CEO to have done so. Nor would Ms. Hart be the first director to similarly inflate her credentials.

What Loeb is hoping for is unlikely to happen — namely that the board be forced to deal with a credibility issue that extends to its decisions to not sell the company and to its process, run by Ms. Hart, to find the current CEO.

The timing of Loeb’s broadside comes one day after Yahoo ratcheted up the rhetoric by saying it believed Mr. Loeb does not bring the relevant skill set and experience to the board, particularly in comparison to the candidates selected by the board.

Loeb, who entered the stock last fall and perhaps wishes he’d exited with the tidy profit he had made in a very short time, chose instead to fight ... claiming there is significant value beyond the current stock price that can be garnered through a sale of the Asian assets and/or the entire company.

And that, of course, is where the real battle will play out. Yahoo has yet to set an annual meeting date, but between now and then, expect plenty more punches to be thrown.

Follow David Faber on Twitter: @DavidFaberCNBC