Einhorn, Icahn and Loeb Circle Their Latest Victims

The stock got hit hard in July, when the company sharply cut its full-year earnings guidance on lower license revenue and marketing spending by consumer-products companies. Since reaching its 52-week high in May, the stock has declined 47%. While the near-term revenue prospects for WebMD are lackluster, the company's longer-term plan is viable. The backing of Icahn is proof that he believes in the story. How he unlocks the value in this one is still to be determined.

Brocade Communications Back on the Block

Elliott Associates increased its stake in Brocade Communications (BRCD), a networking-services provider, to 9.8% last week. Elliott, known for pushing changes at Iron Mountain (IRM) and forcing Novell to put itself up for sale, has now changed its status to become an active investor in Brocade. That opens the door for Elliott to meet with management, discuss strategy and present ideas that might enhance shareholder value.

The change of status comes a week after The Wall Street Journal reported that the company was again looking for a suitor. Qatalyst Partners was hired in 2009 to sell the company, but the process wasn't a success. The boutique investment bank is said to be again actively looking for a new buyer.

Notably, Elliott began investing in the company prior to Aug. 5, when Brocade lowered guidance for third-quarter earnings, and the stock fell 28% to $3.52. Before August, the shares traded in the $5 to $7 range, making Elliott's initial 8.5% ownership cost well above the current stock price of $4.69.

Yahoo Needs New Leadership

On Friday, Third Point's Loeb wrote a letter to Yahoo's (YHOO) Board of Directors, making clear his discontent with a potential sale of Yahoo to a private-equity firm. In the letter, Third Point requested two Board seats -- those of co-founder Jerry Yang and Chairman Roy Bostock.

Third Point invested in Yahoo in early September with an initial investment of just over 5%. At that time, Loeb said the company was severely undervalued due to actions taken by the Board of Directors and company leadership.

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