Third Point investment in Yahoo! in 2011

Third Point LLC invested in Yahoo! in 2011 and made public a presentation for it. If you are interested to learn about how hedge funds write presentations, here is one for you to learn from.

About the Third Point deck

All information is public information (I won’t share anything confidential on this site).

About the deal

In 2011, Third Point LLC, an investment firm led by Daniel Loeb, acquired a significant stake in Yahoo!, marking the beginning of a highly public and confrontational engagement with the internet company’s management and board. Loeb criticized Yahoo! for its underperformance, strategic missteps, and leadership issues, advocating for substantial changes to revitalize the company. Third Point’s investment strategy included public letters to the board, demanding a revamp of the board of directors, the resignation of underperforming executives, and a strategic review to enhance shareholder value.

A pivotal moment in this engagement was Third Point’s revelation of inaccuracies in the academic credentials of Yahoo!’s then-CEO, Scott Thompson, leading to his resignation. This underscored Third Point’s commitment to corporate governance and accountability. The activist campaign resulted in significant board changes, including the addition of Third Point’s nominees to Yahoo!’s board. The investment in Yahoo! is often cited as a prime example of activist investing, where a shareholder uses an equity stake to influence company policy and direction, ultimately aiming to unlock shareholder value.

About Third Point LLC

Founded by Daniel S. Loeb in 1995, Third Point LLC stands out as a prominent hedge fund firm headquartered in New York City. Renowned for its event-driven and activist investment strategies, Third Point focuses on identifying undervalued or underperforming companies and advocating for changes to enhance shareholder value. Employing a combination of rigorous fundamental analysis and a keen eye for corporate catalysts such as mergers, acquisitions, and restructurings, the firm seeks to generate returns by driving strategic changes within targeted companies.

Third Point’s investment approach often involves taking significant stakes in its chosen targets and engaging directly with management and boards to push for operational improvements, capital allocation adjustments, and, if necessary, leadership changes. With a proven track record of successful investments and activism spanning diverse industries including technology, finance, and consumer goods, Third Point maintains its position as a prominent player in the hedge fund industry. Its commitment to identifying opportunities for value creation and driving positive change underscores its reputation as a formidable force in the investment landscape.

About Yahoo!

Yahoo! Inc. is a well-known American web services provider headquartered in Sunnyvale, California. Founded in 1994 by Jerry Yang and David Filo, Yahoo! began as a web directory and quickly evolved into one of the most prominent internet companies of the late 20th century. Yahoo! offered a wide range of services, including a search engine, email, news, finance, sports, and entertainment content. The company’s search engine was one of the most popular in the early days of the internet. Yahoo! also made significant acquisitions, such as Geocities, Flickr, and Tumblr, expanding its portfolio of services and platforms. However, Yahoo! faced challenges in the rapidly changing landscape of the internet, including competition from Google and Facebook. In 2017, Verizon Communications acquired Yahoo!’s internet business, including its email service, news, and sports websites, while the company’s stakes in Alibaba Group and Yahoo! Japan were transferred to a new entity called Altaba Inc. Today, Yahoo! continues to offer a variety of digital content and services under the Verizon Media umbrella, including Yahoo Mail, Yahoo News, Yahoo Finance, and Yahoo Sports.

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Hedge Fund Presentations