Billionaire investor T. Boone Pickens has dumped all of his 10 million shares in Yahoo for an undisclosed loss, stating management issues and a non-merger with Microsoft as reasons for the sudden sale. 

Pickens, who bought 10 million Yahoo shares in May in hoping that an acquisition was imminent, said that he got tired of waiting for a deal.

According to the San Francisco Chronicle, Pickens was quoted as saying; “I think Yahoo management was pathetic.”  A sale to Microsoft at $33 per share would have been a good move for the search engine, and Pickens and other large investors were counting on the merger to cash in.  Shares yesterday closed at just $20.12. 

Pickens invested in Yahoo after corporate activist Carl Icahn started a campaign to replace the company’s board.  Along with a handful of other major shareholders, Pickens pledged to support Icahn’s more “merger-friendly” slate of directors.  Once investors heard the rumor that Yahoo was most likely merging with Microsoft, everyone jumped on board.  When it didn’t happen, everyone got upset and starting dumping.  Pickens was just fed up. 

It was an unusual move into technology for Pickens, who has already acknowledged that at the time that he was unfamiliar with the details of the proxy contest and that he was merely following Icahn’s lead.  Icahn recently settled his on-going boardroom battle with Yahoo, and in exchange, got control of three out of 11 board seats. This is a minority that can push for a sale, but lacks the votes to approve a deal outright.

Yahoo CEO Jerry Yang and Chairman Roy Bostock have repeatedly defended their negotiating with Microsoft by saying that the acquisition offers – for both the entire company and then its search business – were not in the long-term interest of shareholders.  If you ask me they should have taken what was offered and put an end to it all.

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Entry was posted on Tuesday, July 29th, 2008 at 10:50 pm under Internet, Yahoo!.

Read more entries by Justin Montgomery.
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