CNBC’s Brian Shactman reports Third Point’s Dan Loeb is going to war with Yahoo; Facebook says it is struggling to monetize its mobile ad business; Cisco shares tumbled on weaker-than-expected guidance; and News Corp. beat earnings estimates and announces a $5 billion dollar stock buyback.
clip the couponin this sunday’s paper. sc johnson. a family company. comments for dan, she spoke to him about his mission to bring change and a mission is putting it lightly.what’s the latest here? melissa, i came from the panel where dan lowe from third point demanded that the ceo scott thompson step down and spoke publicly for the first time in a while other than the form of a letter about his thoughts on yahoo. character and integrity matter. that of course being of issue. the problem it would seem with scott is he padded hisresume with educational credentials. they missed every trend on the internet. this is yahoo in general. social, local, you name it. there is a lot of work to do, but from the board level, what we want to see is better process and a rebuilding of the wholefirm’s culture. it is bloat and not focused, but this is a great business. this is a great management team we don’t think is as currently constructed. finally he talked about ali ba ba and japan being valuable assets and he would like to see them rationalize. there is no rush. that doesn’t mean liquidateeverything tomorrow. he had positive things to say about the business and there is a lot to be salvaged. he is critical of the board and current management. that was a big theme there. as i have been at salt the last day or two, i heard a lot of fund managers including others talk about equities and theexperience of looking at the stock market. investors are not getting the yields they want or should get from bonds. you don’t want to overallocate. you want to look at equities and studies are showing that investors are shying away. here’s a kicker and exception to that. commentary. he thinks portugal will sneakthrough and it’s not a greece or a ain. a lost interesting thoughts. long portuguese debt. that’s an interesting trade. in terms of yahoo, i wonder if you think it would gain traction. i have a question for you. is there a deal to be had tween the boards? i don’t think that it’s in the board’s interest to have thisfighting go on. i think the deal that they put on the table is replace four of the directors with me and three of my associates, have scott thompson resign and replace him with the global head of media at least on an interim basis while a proper search is conducted. today he said he wants patty hart who ran the search to give back the $15,000 remuneration hegot for fining thompson and he suggests a new search for those who will do it for free. it seems like an ultimatum and you have to wonder whether or not we answered this. i don’t know if you have more traction on this on whether they are willing to press for the change and they have the 5 plus percent change for yahoo making the demands. that’s an excellent question. i must say the sentiment at a place like this and perhaps this is n surprising, you keep it going, dan. he is on a couple of othersenior ceos and a lot of them were voicing support. firing them would be a no brainer and what would you do if you had someone on your board or situation or management team andone said i would fire them immediately. it seems like there is a lot of spirit here. who he is actually lined up in terms of a shareholder coalition is unclear. thanks so much for that. great get there with the comments. the salt conference in las vegas.i still think yahoo is a buy here. i think the risk reward sets uplow. the business is fine. both of them. an activist gains traction and you use the word bloated. i can’t speak to yahoo if it’sbloated, but if he goes in and they clean it up, by definition the company should run better. i’m not saying you can’t go lower, but my sense is the risk reward sets up nicely when you have somebody like dan running the show. that are is the main point. you think about the board turn over they had and the management and the ceos they had, nobody has been able to do it. cutting jobs and this has a billion dollar market cap. when you look at the parts, it’s all in asia. you have cash sitting on thebalance sheet here. there is no doubt that lobe and his people can do a better job than anybody over the last five years and they had three or four ceos and do this deal and get rid of thompson. this is the mental calculation whenever there is anactivist in there. if it is a win-win, either the business must change and the activist will enact change that forces the business to get better. if that’s possible. sometimes kodak could have had a great activist and i’m not saying that yahoo is kodak, but they did look into the sale and montying the assets. i never understood how that fell apart. that’s a lot of the value. it may be low. i have to take a break. we are breaking down cisco’s big slide with the analysts. stay tuned for the commentary.
Q2 Letter: Baupost won big in Q2 with PG&E, eBay, Liberty Global
Seth Klarman's Baupost recorded "strong" gains for the second quarter, although precise numbers were not included in the July 23 letter to investors, which was reviewed by ValueWalk. Klarman said that during the first quarter, they were "substantial purchasers of securities," while during the second, they were "significant net sellers" due to the strong rally. Read More