Four Ways Icahn Can Beat Yahoo!

Yesterday, Carl Icahn amped up the rhetoric in his battle to take control of Yahoo!'s(YHOO - Cramer's Take - Stockpickr) board, by calling for CEO Jerry Yang's head.

"I am amazed at the lengths that Jerry Yang and the board went to entrench themselves in this situation," said Icahn in The Wall Street Journal Tuesday. He added that he thought it was unlikely another bid by Microsoft(MSFT - Cramer's Take - Stockpickr) for Yahoo! would come as long as Yang was in charge.

So now that Yahoo! finally set the date for its annual meeting (Friday, Aug. 1 at the Fairmont in San Jose), the stage is set for eight weeks of proxy fight fun.

Henry Blodget thinks Icahn's got a victory in the bag, saying he already has support from 30%+ of Yahoo! stockholders. He points to assumed support from Capital Research (due to previously critical comments made by Gordy Crawford of Yahoo!'s "so-called" independent board) and Legg Mason(LM - Cramer's Take - Stockpickr) (for similar reasons) and confirmed support from hedge fund heavyweights T. Boone Pickens, John Paulson and Dan Loeb.

The problem with this math is that Gordy Crawford doesn't vote Capital Research's 16% Yahoo! stake himself. He oversees six of that 16%. The balance is overseen by Capital World Investors, which is led by Mark Casey in San Francisco. Cap World will vote for the path that will lead to the highest price per share. Legg Mason and many other larger institutional holders will also take a "show me" attitude to why Icahn's team will get them more money over the existing board.

I disagree with the "show me" line of thought and support Icahn's slate. As far as I'm concerned, after Yahoo!'s last four years' of slipped deadlines, missed opportunities and chronic market under-performance, the burden of proof should lie on the shoulders of the incumbent board and not an activist investor's slate that easily passes a credibility sniff test.