Yahoo! Inc. (NASDAQ:YHOO), its directors, and activist investor Daniel Loeb and his firm Third Point no longer face legal action from a Yahoo shareholder. Lawrence Zucker had filed suit against all of them last July in the New York State Supreme Court, accusing Yahoo of paying Loeb too much for the shares it bought back from him.
Zucker drops lawsuit against Yahoo
Bloomberg reports that a court filing dated June 13 shows that Zucker decided to drop the case. He alleged that Yahoo! Inc. (NASDAQ:YHOO) paid $50 million too much to repurchase shares from Daniel Loeb. According to the court filing, the investor decided that it was in “the best interest” of both shareholders and Yahoo itself if he dropped the suit. He stated that neither he nor his lawyers have gotten any payment for deciding to drop the case.
On July 22, 2013, Yahoo! Inc. (NASDAQ:YHOO) announced that Loeb was going to leave the board and would sell $1.15 billion of his stake back to the search giant. The activist investor spent nearly two years in trying to turn the company around.
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Loeb’s out of Yahoo
In the first quarter of this year, Dan Loeb’s Third Point reported in its quarterly 13D regulatory filing that it had sold all of its stake in Yahoo! Inc. (NASDAQ:YHOO). Shares of Yahoo rallied nicely between last July and January of this year. However, they have declined slightly from their one-year high of around $40 per share. As of now, the stock is trading closer to $35 per share.
Shareholders appear to be happy with Yahoo! Inc. (NASDAQ:YHOO) CEO Marissa Mayer’s strategy so far, which has been to buy up numerous smaller companies. Lately much of the search giant’s share price has been linked with its stake in the profitable Chinese online retailer Alibaba. However, when Alibaba holds its initial public offering, Yahoo will be selling off a chunk of its stake. That will cut down the search giant’s position from its current 22.6% stake in the online retailer.