In fact, hand to god, Dan Loeb and Co. find this “embarrassing episode” that they set the wheels in motion for painful to watch.

Dear Board of Directors:

Six days have passed since Yahoo! acknowledged the fabrications in Chief Executive Officer Scott Thompson and Director Patti Hart’s resumes. Since then, the following has occurred: (i) shareholders have been told that Mr. Thompson’s errors were “inadvertent”, (ii) Mr. Thompson made a classic “I’m sorry you feel that way” non-apology without actually accepting responsibility, (iii) Ms. Hart announced she will not seek re-election to the Board presumably due to her leadership of the botched CEO hiring process but intends to serve out her term, and (iv) the Board has formed a special committee to conduct a “thorough review” into Mr. Thompson’s academic credentials.

It appears very clear to us – and to many corporate governance experts, Yahoo! employees, and fellow Yahoo! shareholders – that Mr. Thompson’s fantasy degree was in no way an “inadvertent error”. The evidence shows he had been using false credentials for years. Mr. Thompson’s “apology” was clearly insufficient and it seems that the only thing he actually regrets is that he has been caught in a lie and publicly exposed. Without any explanation or accountability, Yahoo! has been left to flounder under a discredited leader for an undefined period. So, after six days, we must ask – what is this Board waiting for?

It seems farcical to us that the Board will most likely spend more time deliberating over whether Mr. Thompson should be fired than it did properly vetting whether he should have been hired. The necessary investigation into whether certain senior executives and Board Members knew of Mr. Thompson’s deceptions before hiring him should not delay decisive action over his ethical breaches.

Third Point has over $1 billion invested in Yahoo! and we take no joy in witnessing this carnage. This Board’s unchecked value destruction must stop once and for all. Therefore, we once again call upon the Board to immediately (i) place Third Point’s entire slate on the Board replacing Mr. Thompson and Ms. Hart, (ii) appoint an interim CEO—we would suggest CFO Tim Morse or Head of Global Media Ross Levinsohn (assuming neither had any knowledge of Mr. Thompson’s fabrications) and (iii) allow Third Point nominee Michael Wolf to Chair the Search Committee for a new permanent CEO (Mr. Wolf will waive the $15,000 fee that Ms. Hart received for her work as Head of the Search Committee last year, which we expect she will promptly disgorge).

This is the only way for Yahoo! to move past this embarrassing episode.

Daniel S. Loeb
Chief Executive Officer
Third Point LLC

50 comments (hidden to protect delicate sensibilities)
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Comments (50)

  1. Posted by Equity analyst quant | May 9, 2012 at 12:13 PM

    You have over $1bn invested in Yahoo? Well, there's your problem, right there.

  2. Posted by Jerry Y | May 9, 2012 at 12:19 PM

    I did a quick Yahoo! search for HF managers with soul patches and it came up empty

  3. Posted by Hansel | May 9, 2012 at 12:19 PM

    I wasn't like every other kid, you know, who dreams about being an astronaut, I was always more interested in what bark was made out of on a tree.

  4. Posted by Bandersnatch | May 9, 2012 at 12:22 PM

    Take no joy in witnessing this carnage? Bullshit. Loeb thinks he's Patton: "I love it. God help me I do love it so. I love it more than my life."

  5. Posted by guest | May 9, 2012 at 12:22 PM

    Daniel Loeb trying the easiest way to become a millionaire, start with a billion and buy YHOO

  6. Posted by merriam webster | May 9, 2012 at 12:24 PM

    Loeb's thesaurus must be tired

  7. Posted by Concerned Headhunter | May 9, 2012 at 12:25 PM

    But he had 20,000 connections on LinkedIn !!!

  8. Posted by Oklahoma Mullet | May 9, 2012 at 12:28 PM

    I wish Loeb owned 20% of CHK.

  9. Posted by dumb | May 9, 2012 at 12:30 PM

    Hey, i take offence to that….

    Jerry Yang
    Co-founder and former CEO of Yahoo

  10. Posted by Mason Hawkins | May 9, 2012 at 12:30 PM

    Didnt like our bizarre rambling letter, passively aggressively calling for the sale of the company, but not at too low a price?

  11. Posted by Gerri Ying | May 9, 2012 at 12:43 PM

    Low blow, Loeb, loe bloe.

  12. Posted by MMA Phiter | May 9, 2012 at 12:48 PM

    End quotes should appear outside of the punctuation. Other than that, I have no concerns.

    -Word Processor Monkey Boy

  13. Posted by Wall St. Dude | May 9, 2012 at 12:54 PM


  14. Posted by Guesty | May 9, 2012 at 1:05 PM

    I am still in the lead.

    P. Falcone

  15. Posted by Bishop Sheen | May 9, 2012 at 1:11 PM

    There was a "St. Dude"? And why would you want to "wall" him?

  16. Posted by PermaGuestII | May 9, 2012 at 1:15 PM

    There can be only one Dude.


  17. Posted by Guest | May 9, 2012 at 1:15 PM

    Yahoo doesn't care about his academic record. This became obvious when they made a Stonehill College grad their CEO.

  18. Posted by Indubitably | May 9, 2012 at 1:22 PM

    Is this what people do all day on the buy side? Sit around and check cross Google searches against 10Ks?

    -Guy who still dreams of the buy side

  19. Posted by pazzo83 | May 9, 2012 at 1:35 PM

    Farcical in an aquatic ceremony type of way?

  20. Posted by Guest | May 9, 2012 at 1:36 PM

    "Now there's another thing I want you to remember: I don't want to get any messages saying that we are holding our position. We're not holding anything; let Yahoo! do that. We are advancing constantly, and we're not interested in holding onto anything except board seats. We're going to hold onto these directors by the nose and we're going to kick them in the ass. We're going to kick the hell out of them all the time, and we're going to go through them like crap through a goose."

    – General D. S. Loeb

  21. Posted by Guest | May 9, 2012 at 1:37 PM

    I bet Loeb's wife is completely satisfied in the bedroom. For sure.

  22. Posted by Jules | May 9, 2012 at 1:37 PM

    You sending the Wolf?

    You feel better $%*#&?

    Sh** *$@#$ thats all you had to say!

  23. Posted by Headless_Horseman | May 9, 2012 at 1:47 PM

    Investing $1bn in Yahoo! is like owning 12 acres of a 9 acre farm.


  24. Posted by pazzo83 | May 9, 2012 at 1:55 PM

    1. Take a significant long position in a company (e.g. buy $1bn of their stock)
    2. Do everything humanly possible to tarnish said company's image in the public eye
    3. ???
    4. Profit!

    – UBS Portfolio Management

  25. Posted by sistermaryelephant | May 9, 2012 at 1:59 PM

    I hope you know this will go down on your permanent record.

  26. Posted by MMA Phiter | May 9, 2012 at 2:03 PM

    Not in my neighborhood.

    -North Carolina

  27. Posted by Guest | May 9, 2012 at 2:19 PM

    Third Point has over $1 billion invested in Yahoo!

    – guy who thought for a second he was excited about it until he read "and we take no joy in witnessing this carnage."

  28. Posted by Robert Winkle | May 9, 2012 at 2:20 PM

    Dan – Why didn't you listen to me?

  29. Posted by Guest | May 9, 2012 at 2:21 PM

    Jurrasic Park was just a movie, idiot.

    – UBS MD

  30. Posted by Frequent gorger | May 9, 2012 at 2:45 PM

    No "promptly disgorge" tag?

  31. Posted by Chiarb | May 9, 2012 at 2:53 PM

    Yes, that and organize bear raids targeting momentum stocks heavily owned by retail investors, typically via Yahoo message boards.

  32. Posted by Moistened Bint | May 9, 2012 at 2:57 PM

    What do you mean?

  33. Posted by Leopold | May 9, 2012 at 2:58 PM

    And you call this the perfect crime?

  34. Posted by Wire | May 9, 2012 at 3:00 PM

    Yes, and often Google searches for stuff not in 10-Ks.


  35. Posted by Guest | May 9, 2012 at 3:12 PM

    If this Yahoo! thing doesn't work out Loeb has a bright future selling access to the "Things that Piss Me Off" folder of his Outlook Inbox.

  36. Posted by Lynn T | May 9, 2012 at 3:13 PM

    I believe the proper term is "cum catcher"

    – Lynn T

  37. Posted by Raj | May 9, 2012 at 3:26 PM

    Yeah… Google stuff…

  38. Posted by GGGGuest | May 9, 2012 at 4:01 PM

    Beer raid? Mmmmm.

  39. Posted by google exec | May 9, 2012 at 4:34 PM

    love it.

  40. Posted by guest | May 9, 2012 at 4:48 PM

    Patti Hart: This is pathetic!
    DL: You're pathetic.

  41. Posted by davidrusso | May 9, 2012 at 5:04 PM

    More impressive than my wicked vitriol and attention to detail is the fact I was able to type this letter at all with my huge, throbbing erection getting in the way.

    D. Loeb

  42. Posted by Shecky Filo | May 9, 2012 at 5:07 PM

    I really, really like Yahoo! Calendar…….. but it looks like its days are numbered.

  43. Posted by FactInventor | May 9, 2012 at 5:25 PM

    Not if you're 'British'.

  44. Posted by Johnny English | May 9, 2012 at 5:39 PM

    outside of?

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    Bob Loblaw Law Blog

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    "Ball pad"

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