Shareholder Activism in Action: Icahn Eyes Yahoo!

Updated on May 15.

From Report: Icahn Zeroes in on Yahoo!:

Shares of Yahoo! YHOO climbed Tuesday [May 13] on news that billionaire activist investor Carl Icahn may be considering a proxy fight.

The stock rose 5.2% to $26.56 after CNBC reported that Icahn is planning to launch a proxy fight in time for Yahoo!'s annual shareholder meeting scheduled for July 3.

Shareholders have until Thursday to nominate a board of directors.

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From 'Fast Money' Recap: Icahn Lifts Yahoo!:

Karen Finerman called Carl Icahn's actions in Yahoo! "Carl 101." She said that with an irate shareholder base that's ready to skewer management, Icahn is well positioned to implement change at the troubled Internet company. If Icahn can get Gordon Crawford at Capital Research on board, then he'll be set. If not, he'll have a hard time.

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From Icahn's Yahoo! Proxy Battle Advances:

Sources have told Reuters that Icahn now has more than enough people to unseat Yahoo!'s entire 10-member board, all of whom are up for election at the company's annual shareholder meeting on July 3.

If the reports are true, Icahn will have just squeaked by Yahoo!'s deadline to nominate candidates for the board. Yahoo! set the date for the end of the day on Thursday, a tight turnaround for anyone trying to push through his or her own slate.

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From 'Fast Money' Recap: Yahoo! Stays in Play:

The traders discussed Icahn's pursuit of a 12-member slate for Yahoo's board, meaning he's seeking a full slate. Finerman said that a full board is much harder to win than a half board, because proxy advisory firms have a harder time condoning elimination of an entire board. She said this means there's higher risk that a deal will not get done.

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From Icahn Launches Bid for Yahoo! Board Seats:

In a letter to Yahoo!'s Chairman Roy Bostock Thursday [May 15], Icahn said the Internet search giant "acted irrationally" and has lost the faith of shareholders and Microsoft MSFT, which tried to acquire the company at a price of $33 a share, an offer that Yahoo!'s management said was too low.

"It is quite obvious that Microsoft's bid of $33 per share is a superior alternative to Yahoo's prospects on a standalone basis," Icahn wrote to Bostock. "I am perplexed by the board's actions. It is irresponsible to hide behind management's more than overly optimistic financial forecasts. It is unconscionable that you have not allowed your shareholders to choose to accept an offer that represented a 72% premium over Yahoo's closing price of $19.18 on the day before the initial Microsoft offer."

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Cramer: A Reason to Buy Yahoo! Activist shareholders could get this stock higher by next year, says Jim Cramer [on May 6].

Shareholder Activism and You

Let's say you want to play a more active role in the performance of a public company, but you can't afford to own a large enough number of shares. What can you do then?

Specifically, how can you trade off of and learn from the activity of investors who can afford a 5+% stake?

The following are several looks behind the scenes of activist investing.