Everything Cool At Third Point - Dealbreaker

Everything Cool At Third Point

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We often stay up nights wondering if our billionaire fundy friends are secretly hemorrhaging money, seconds away from being forced to shutter it up and call it a day. So it's nice when we can, for instance, check Third Point off the list. Founder Dan Loeb finally closed on his $45 million, 10,674 square foot penthouse at 15 Central Park West, paid for in cash. We take that to mean things are fine, for now. Joy! We'll sleep a little better tonight, except for that nagging feeling that Pirate Capital's Jolly Roger is headed into a shit storm, a sense we get not from any sort of P&L intel, per se, but because sources tell us Tom Hudson is three months behind with rent on his mausoleum.*
15 CPW ALERT! Loeb's $45 M. 'Panorama' [New York Observer]
*The "powers" that be around here want me to tell you that I'm just kidding about the delinquent payments. We're sure Tom has all his affairs in order.

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Yahoo! RésuméGate, Day 7: Third Point Is Not Enjoying This At All

In fact, Dan Loeb and Co. find this "embarrassing episode" 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. Sincerely, Daniel S. Loeb Chief Executive Officer Third Point LLC