Starboard Value, a Hedge Fund, sent both AOL and Yahoo shares up considerably with renewed pressure that Yahoo purchases AOL.
Yahoo shares jumped 3.4% to $50.23 a share. AOL shares jumped 7.6% to $49.62 a share.
Starboard chief Jeff Smith said he was concerned about reports that Yahoo is considering an acquisition of cable networks such as CNN.
Starboard Value has a history of overthrowing leadership in companies most notably Olive Garden. He would much rather Yahoo purchase and merge with AOL than for them to jump into the cable networking industry.
Smith stated he sees “cost synergies of $1 billion” if the two companies were to become one. Smith even went as far as warning Marissa that they would take action and even to go as far as trying to have her removed as CEO.
In defense of Marissa, she has turned the company into something that is no longer a laughing-stock of Silicon Valley. In a post on NDTV, they state that Marissa Mayer has made Yahoo “cool again.” The company has a huge increase in its stock value, with the acquisition of Tumblr, Yahoo has gained a lot of leverage for negotiating with advertisers, and the increase in mobile applications is helping to propel Yahoo.
Starboard Value is almost acting a little hot-headed here, and trying to dictate what Marissa should do despite the fact she is slowly turning the company around. Yahoo was almost bought out by Microsoft for 40 billion dollars, but today it is the one making huge acquisitions. Marissa Mayer is making the company something that it was never going to be if it continued on its path.
The NewYork Times had also attacked Marissa in a rather sexist post published back in late December of 2014. This sparked critics to jump on the NewYork Times pointing out that Marissa was clearly being profiled and was not receiving the credit she deserved.
The fact is while a merger between Yahoo and AOL is a good idea, Marissa is receiving an unfair amount of criticism from both journalists and investors alike.