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Yahoo is a basic example of activist investing. Activist investors try to increase shareholder value in the companies they invest in, in any way possible, to ac
by charlesdm 10y ago
Yahoo is a basic example of activist investing. Activist investors try to increase shareholder value in the companies they invest in, in any way possible, to achieve above average returns for their investors.
If that means burning down the house (e.g. selling a company in bits and pieces, or pushing certain strategic changes) then they will.
Apple has plenty of cash on their books. If an activist shareholder could somehow force them to spend all that cash on buybacks (-> significant share price increase), they can make a nice buck that way. That's actually what Carl Icahn did, over the last few years.
- bpodgursky 10y agoYahoo was a bloated carcass by the time activist investors got involved. Cutting the fat, selling off parts, and returning some value to investors was the only fair outcome.
- adrr 10y agoYahoo stock price went up 400% in 5 years. Investors made out quite well.
- gaius 10y ago... almost entirely off their stake in BABA. YHOO was effectively just an ETF invested in just one stock, their actual business had negative value.
- charlesdm 10y agoMeaning it was a good activist play? It was trading negatively because there was a chance Yahoo management would sell that BABA stake, and use that money to fund their operating business.