This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Marissa Mayer's First Big Bungle at Yahoo!

Stock quotes in this article: YHOO

But given the 10% drop in Yahoo!'s stock in a few short days, this decision by Mayer to put out that 8-K is her first big mistake -- and a sign of her inexperience as a CEO. As Kara Swisher said today, one investor described now being in "Marissery."

Mayer probably thought she was sending a strong message to employees and shareholders that she's in charge now and will do what she thinks is necessary to create long-term shareholder value, including making a big acquisition.

After all, her board made the promise to return capital before she arrived and then told her she'd have full control and lots of time to turn around Yahoo! She's also taken down Yahoo!'s stock price from its internal employee intranet homepage.

Some in the media cheered this as a sign that she's all about being product-centric instead of stock price-centric.

But why did she have to release this 8-K last week? There's presumably going to be money coming in from a Yahoo! Japan stake sale. Such a deal is also rumored to be involving a cash-rich split, which means, by definition, Yahoo! will get a bunch of assets of its choosing (worth at least $1.5 billion) in addition to $3 billion in cash.

And she could also cull the bloated head count. Both of those actions would have given her ample ability to go out and do deals if she wanted to in a fairly short amount of time -- without touching the shareholders' promised money from the Alibaba deal.

Sometimes people in the Valley get a little disconnected from Wall Street. The Valley elites look down at the Wall Street elites thinking one creates real stuff and the other just makes money off it.

But, let's get real. Like it or not, shareholders are as critical a stakeholder group to Yahoo!'s future as its own employees.

I could argue that if Mayer did a better job of getting shareholders on board -- increasing the stock price by 10% instead of dropping it 10%, as it did in the last few days -- her life and all the grand plans she probably has for turning around the company would be a lot easier than it is today.

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,809.84 -233.06 -1.37%
S&P 500 1,945.83 -26.46 -1.34%
NASDAQ 4,415.8780 -77.5120 -1.72%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs