Posted November 12, 2014 10:16 am by with 8 comments

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Yahoo's Stock Price

If you were an investor in any company that experienced the above growth in the past 2 years, you’d probably be pretty happy with whoever is running the ship.

Unless of course that ship were Yahoo, which perennially has at least a handful of influential shareholders who either a) don’t like the direction the company is heading or, b) want the company sold off or merged with someone else.

That’s the position Marissa Mayer finds herself in, despite the pretty impressive stock price growth since she took over the CEO role in July 2012. According to Reuters, at least two large Yahoo shareholders are unhappy with her performance:

…[the] shareholders are so unhappy with Chief Executive Marissa Mayer’s turnaround efforts that they are making a direct plea to AOL Inc CEO Tim Armstrong to explore a merger and run the combined company.

Armstrong has been receptive to these Yahoo shareholders and…has indicated he would only consider a friendly deal, the investors said.

While it is true that Armstrong has “revived a dying brand” he’s also had longer to do so–his first few years at the helm were mediocre at best. Meanwhile, Mayer inherited a lot of baggage and has being trying to give Yahoo the same identity and direction that Armstrong has finally found with AOL. She’s barely two years into that revival, so perhaps needs to be cut some slack.

While her critics will argue that Yahoo’s impressive growth is due to the explosive growth of its stake in Alibaba, that’s like telling Saudi Arabia that the country is only rich because of its oil production. It’s still rich!

  • Bronze Helmet

    No, she did not triple the price. Jerry Yang did. This is entirely Alibaba growth.

    • I guess you didn’t make it to the end of the post. 😉

      • Maybe he did or did not read to the end. Regardless, you are missing the point, which is that MM has *presided over* a big rise in the stock, not *caused* a big rise. Analysts (or anyone) can and do break out the components of value within the share price, and Alibaba and cash account for essentially all the value, IIRC. The remaining core operating business has essentially no market capitalization. THAT is why people look at MM and are dissatisfied. BTW, every Yahoo CEO has sucked in this regard. It is a company that generates little market capitalization value. Yes, it employs tons of people, which is a social good. I’m just saying that from a stock market perspective, if you broke apart YHOO into several securities, the security representing the core business would have a very low market cap. So think of how much *better* YHOO would be as a stock if MM had actually built value in *that* part of the business… The idea of bringing in Armstrong, who is a proven market cap builder based in his turnaround of AOL’s market cap, now makes more sense, right?

        • I’m not against the idea of Armstrong taking over, but if you judge MM performance based on the past two years it’s arguably better than Armstrong’s first two years on the job. As for the semantics of “caused” vs “presided over” she was still the CEO during that growth. I’ve seen many CEOs take a sure thing and completely destroy it. 😉

      • J.V Dubois

        He might have made it to the end. And his argument could be that king Abdullah did for wealth of Saudi Arabia exactly the same thing that Marissa Mayer did for Yahoo – absolutely nothing.

  • EURUSDog

    As long as she can continue to benefit from purchasing fabulous start ups and watching them go public, she’s in great shape. From an operating income standpoint though, there is a bit of trouble. It’s amazing that people still equate stock price with underlying value, that is the ability to continually deliver dividends and dividend growth.

  • Yahoo’s investors have a pretty bad track record for dictating direction to the company. They should have left Yang in place and shown Carl Icahn the door. He created this mess. All he seems to believe in is carving up companies and selling off the assets.

  • Mike

    “Marissa Mayer has tripled Yahoo’s stock price, but apparently that’s not enough.” This headline implies MM was responsible for this incredible growth. This is simply not true. Without Alibaba, the stock would not have performed like this. Does the author of this article not understand the basics?