Yahoo! is in good hands
Although Third Point has now sold two-thirds of its Yahoo! stake, the fund writes that the company will continue to “thrive” under new CEO Marissa Mayer.
Since Loeb first got involved, Yahoo!’s board and top management has been gutted. Third Point notes that the board is now 90% composed of new members, and Yahoo! has a new CEO and CFO.
Third Point writes that the company has “increased engagement” and seen a “surge of talent.” At the same time, momentum for new mobile products has increased.
Analysts at Needham downgraded Yahoo! to a hold last week on Loeb’s exit. Given that Loeb is selling, he could see limited upside from here.
Still, Third Point has not exited its entire stake, and Alibaba has yet to go public. Meanwhile, the question of what will happen to Yahoo! Japan remains unanswered.
Since Third Point has doubled its investment, selling some of its position would seem like prudent portfolio management. At the same time, the fund is closed to outside investors, and its capital is limited.
Perhaps the fund is selling some of its Yahoo! shares to raise capital for a bigger Sony stake. If Third Point increases its stake, it may be more likely to sway Sony's management.
Dan Loeb is coldone.