Starboard Will Nominate Nine Directors To Yahoo Board

In an open letter to Yahoo! Inc. YHOO shareholders, Starboard Value LP has announced it intends to nominate nine candidates for election to Yahoo’s Board of Directors. Starboard is one of Yahoo’s largest investors and currently holds about a 1.7 percent stake in the company.

In the letter, Starboard argues that Yahoo’s stock is currently “deeply undervalued,” and the firm believes current management is to blame.

“Unfortunately, as we have outlined in previous letters, we have been extremely disappointed with Yahoo’s dismal financial performance, poor management execution, egregious compensation and hiring practices, and general lack of accountability and oversight by the Board,” the letter reads.

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According to Starwood, this aggressive measure comes after efforts to work with Yahoo in the past 18 months have been met with resistance.

Starwood notes that Yahoo management declared publicly that EBITDA had troughed in Q3 2014 and would begin to grow. In reality, it dropped 47 percent over the next year. Another example of mismanagement that Starwood mentions is the fact that Yahoo has already written down $1.2 billion of its $2.3 billion in acquisitions since 2012.

Yahoo’s stock is down 21.6 percent in the past year, but is up 5.4 percent so far in 2016.

Disclosure: the author holds no position in the stocks mentioned.