Institutional Investor's Alpha Magazine - July/August 2008 - (Page 5)

Longs The Blog Age R ather late in life, Carl Icahn has overcome his supposed aversion to online communications, taking up an electronic cudgel in his quest to unseat Yahoo!’s board of directors and become — almost overnight — perhaps the world’s most closely followed 72-year-old blogger. “Everyone who is invested in the Yahoo! situation is reading anything about or by Carl Icahn,” says Jeffrey Lindsay, an Internet analyst at New York–based Bernstein Global Wealth Management, referring to Icahn’s effort to wrest control of Yahoo! from its founders and have the company accept a takeover bid by Microsoft Corp. “It’s one of the very few windows into what’s going on with the proxy.” Icahn seems an unlikely digital crusader. His online critics in particular dismiss him as a curmudgeon from a generation that knows little or nothing about how to evaluate new-media companies. But Lindsay and others praise his blog, saying it is vintage Icahn in some respects. “It seemed like a godsend to most shareholders,” Lindsay says, arguing that Icahn’s ﬁnancial acumen trumps whatever dot-com shortcomings he may have. “I don’t think there’s anything magic about Internet companies. You need to know how to do deals.” “It’s the ﬁrst time there is an online voice making an impact,” asserts Eric Jackson, manager of tiny ($5 million) Ironﬁre Capital hedge fund in Naples, Florida, and an Icahn ally in the ﬁght with Yahoo!. Icahn, who became famous as a ruthless corporate raider, in part by dismantling Trans World Airlines in 1985, before becoming a hedge fund manager and activist investor, doesn’t update his blog daily — in fact it can go untouched for weeks. But he is persistent and ﬂavors his dispatches with a populist insouciance that questions the general competence of top business leaders, whom, he says, are all too often rewarded with obscenely rich salaries. “Corporate democracy is a myth,” Icahn writes. “Board meetings are often a complete travesty. There is no leadership in the executive suite.” He isn’t the ﬁ rst activist investor to harness the Internet. Christopher Hohn, chief of the Children’s Investment Fund Management (UK) in London, created a Web site to good effect in his proxy ﬁght with CSX Corp., the Jacksonville, Florida–based railroad company. And a year and a half ago, Jackson, the Ironﬁ re manager, began a Web-based campaign to unseat Yahoo!’s board, writing a blog that predates Icahn’s and posting YouTube videos to persuade about 150 small investors to join the campaign. But it’s tough to top Icahn’s forcefulness. In a letter posted on July 14, he used his caps-lock key to rally shareIllustration by Joshua Gorchov for Alpha & Shorts Carl Icahn versus Yahoo!: Portrait of the blogger as a notso-young man. holders for a proxy vote scheduled for August 1: “Our company is on a precipice and our board seems ready to take the risk of seeing it topple — ARE YOU, THE REAL OWNERS OF YAHOO!, WILLING TO TAKE THE SAME RISK?” — Frances Denmark Wanted: New Blood W hen senior investment officer Christianna Wood left the California Public Employees’ Retirement System in February, the largest U.S. pension fund’s loss was the hedge fund industry’s gain. Wood, who oversaw investment strategy and policy JULY/AUGUST 2008 • INSTITUTIONAL INVESTOR’S ALPHA • 5

Table of Contents Feed for the Digital Edition of Institutional Investor's Alpha Magazine - July/August 2008

Institutional Investor's Alpha Magazine - July/August 2008 Contents Letter from the Editor Longs & Shorts Pension Corner: Mr. Big Goes Small The Good Guys: Adopt This School! Interview: Man's Great Hope Cover Story: The Gentleman Activist Strategies: The New Bankers Profile: Staying Alive Research Center: The Best of the East The Asian Sensations Alpha Bytes: Into the Light Unhedged: Commentary: Speculating on Washington

Institutional Investor's Alpha Magazine - July/August 2008

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