Hedge Funds Flock Toward Embattled Yahoo! (Update 1)

Updated from 10:04 a.m. EST to provide additional hedge fund holdings from York Capital and KKR and updated share price.

NEW YORK ( TheStreet) -- Even though Yahoo! ( YHOO) has apparently tabled the sale of its Asian assets for now, hedge fund managers were adding the troubled Internet giant during the fourth quarter.

Of the managers initiating or adding stakes in the fourth quarter, the most notable ones were Dan Loeb of Third Point LLC and David Einhorn of Greenlight Capital. Loeb increased his Yahoo! stake from 56 million shares to 68.9 million shares, according to a 13F document filed with the SEC.

Hedge funds have been flocking to embattled Yahoo!

Loeb also started a proxy fight with the company on Tuesday, announcing a slate of four directors for the board. He suggested himself, Harry J. Wilson, Chairman and CEO of MAEVA Group LLC, Michael J. Wolf, CEO of Activate and Jeffrey A. Zucker, the former CEO of NBC Universal.

Here's a list of some of the most important hedge fund managers who added to or subtracted from their Yahoo! holdings during the fourth quarter.

David Einhorn, Greenlight Capital -- New York-based Einhorn initiated his stake in Yahoo!, and had 3,018,887 shares as of the end of Dec. 31, 2011.

Diamondback Capital -- The notoriously secretive Stamford, Ct.-based hedge fund nearly doubled its stake, adding 4.1 million shares during the quarter to increase its position to 8.1 million shares.

David Shaw, D.E. Shaw & Co. -- One of the world's largest hedge funds cut 1.5 million shares from its position, leaving nearly 3.9 million shares of Yahoo! in its portfolio at the end of the quarter.

James Dinan, York Capital Management-- York Capital, led by CEO James Dinan, initiated a large position in Yahoo!, holding a 5.6 million share stake in Yahoo! as of the end of the quarter.

Paul Tudor Jones, Tudor Investments--Tudor Jones, long thought to be one of the smartest hedge fund managers, increased his fund's position by just over 1 million shares for a total stake of 1.15 million shares.

Wesley Edens, Fortress Investment Group ( FIG)-- The publicly traded hedge fund led by Wesley Edens initiated a stake in the company, adding 209,443 shares during the quarter.

KKR Asset Management-- The asset management arm of private equity firm KKR ( KKR) initiated a stake of 473,500 shares in Yahoo! by the end of the quarter

George Soros, Soros Family Fund-- Legendary investor Soros initiated a small position in Yahoo! during the fourth quarter, adding 167,600 shares for a total of 180,000 shares as of the end of 2011.

Ken Griffin, Citadel Advisors -- The legendary Chicago-based hedge fund subtracted nearly 3.8 million shares to pare the position down to almost 5.4 million shares.

Early in 2012, Yahoo! named Scott Thompson as its CEO. Thompson was the former President of PayPal, a subsidiary of eBay ( EBAY).

Yahoo! shares were off 1.5% to $15.13 in Wednesday trading.

For the rest of Third Point's investments, check out Dan Loeb's portfolio on StockPickr.

Interested in more on Yahoo!? See TheStreet Ratings' report card for this stock.

Check out our new tech blog, Tech Trends.

-- Written by Chris Ciaccia in New York

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