Daniel Loeb, the billionaire hedge fund investor, is selling the majority of his hedge fund’s stake in Yahoo and resigning from the company’s board of directors, as he moves to bring one of the most high-profile and successful investments of his career to a close.
Loeb’s Third Point hedge fund will sell 40 million shares back to the company for a total of $1.16 billion and will for now be left with another 20 million shares, meaning the combined current value of Loeb’s investment in Yahoo is worth more than $1.7 billion. Loeb paid much less for those shares when he started buying them in August 2011 and the shares were trading hands for some $13.
Loeb’s average costs basis for his entire stake in Yahoo is about $13.50 a share. Yahoo is repurchasing Loeb’s stock for $29.11 a share, the closing price of Yahoo’s stock on Friday, meaning the stock has returned 124% since Loeb has been involved in the stock. In the end, Loeb’s investment in Yahoo has more than doubled and his hedge fund, which also sold some Yahoo shares earlier this year, has made about $1 billion on Yahoo in less than two years.
The high-profile investment in Yahoo came at a time when Loeb was transforming himself from a brash activist investor into one of the most prominent and successful investors and activists onWall Street. While most hedge funds have struggled, Loeb’s investment performance in the last 18 months has been very strong and his Third Point firm now manages $13 billion.Loeb’s involvement with Yahoo has been highly symbolic for his hedge fund business, Yahoo, and to a certain extent Silicon Valley itself. Loeb has played a defining role for Yahoo, getting the company’s CEO, Scott Thompson, to resign last year after exposing that Thompson’s resume contained a computer science degree that he had never received. He also helped Yahoo poach a rising star fromGoogle GOOG +1.57%, Marissa Mayer, who has emerged as a rock star CEO who has revitalized Yahoo’s fortunes.
For Silicon Valley, Loeb’s intervention in Yahoo has come at a pivotal time. Many people in Silicon Valley were highly dismissive of Loeb when he first got involved in one of their most storied Internet companies. Loeb’s Yahoo adventure also occurred while Mark Zuckerberg, founder and CEO of Facebook, was taking his company public on Nasdaq, a move Zuckerberg delayed for years and tried to avoid because of his distrust of Wall Street and guys like Loeb. In the last year, however, Yahoo’s stock has been a huge success while Facebook’s IPO has been a black eye for the company. Silicon Valley’s leaders have long railed against New York hedge fund traders, but Loeb, who sat on Yahoo’s board, has dented that narrative.
Eighteen months ago, none of Silicon Valley’s thought leaders predicted the kind of statement that came out of Yahoo from Mayer on Monday: “Daniel Loeb had the vision to see Yahoo for its immense potential – the potential to return to greatness as a company and the potential to deliver significant shareholder value.”
The high-profile investment in Yahoo came at a time when Loeb was transforming himself from a brash activist investor into one of the most prominent and successful investors and activists onWall Street. While most hedge funds have struggled, Loeb’s investment performance in the last 18 months has been very strong and his Third Point firm now manages $13 billion.Loeb’s involvement with Yahoo has been highly symbolic for his hedge fund business, Yahoo, and to a certain extent Silicon Valley itself. Loeb has played a defining role for Yahoo, getting the company’s CEO, Scott Thompson, to resign last year after exposing that Thompson’s resume contained a computer science degree that he had never received. He also helped Yahoo poach a rising star fromGoogle GOOG +1.57%, Marissa Mayer, who has emerged as a rock star CEO who has revitalized Yahoo’s fortunes.
For Silicon Valley, Loeb’s intervention in Yahoo has come at a pivotal time. Many people in Silicon Valley were highly dismissive of Loeb when he first got involved in one of their most storied Internet companies. Loeb’s Yahoo adventure also occurred while Mark Zuckerberg, founder and CEO of Facebook, was taking his company public on Nasdaq, a move Zuckerberg delayed for years and tried to avoid because of his distrust of Wall Street and guys like Loeb. In the last year, however, Yahoo’s stock has been a huge success while Facebook’s IPO has been a black eye for the company. Silicon Valley’s leaders have long railed against New York hedge fund traders, but Loeb, who sat on Yahoo’s board, has dented that narrative.
Eighteen months ago, none of Silicon Valley’s thought leaders predicted the kind of statement that came out of Yahoo from Mayer on Monday: “Daniel Loeb had the vision to see Yahoo for its immense potential – the potential to return to greatness as a company and the potential to deliver significant shareholder value.”
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