Carl Icahn, the billionaire investor that, upon close scrutiny, makes one think of the major character Gordon Gekko in ‘Wall Street’, shows what is wrong with America, and rampant capitalism fueled only by greed.

Yes, I know how that sounds. No, I am no lover of communism, or even socialism, but unlike Gordon Gekko, I don’t happen to believe that ‘capitalism just works’. Anytime humans are a part of something, there is chance for disaster. That is what is beginning to happen here.

Why this corporate raider has decided to insinuate himself into the business of Yahoo is beyond me, but then that is part of the problem. It should be beyond him, too. People who are involved in things only for the money should probably get out.

from Betanews

In the opening move of a game he plays better than anyone alive, billionaire investor Carl Icahn has named a powerhouse team of investors and executives who would be ready and willing to lead Yahoo into a big future with Microsoft.

The dissident proxy slate of Yahoo directors proposed this morning by Icahn Capital chief Carl Icahn is comprised of frequent Icahn allies associates, along with extremely accomplished executives and investors. Icahn unveiled his team this morning in an open letter to Yahoo Chairman Roy Bostock.

“It is clear to me that the board of directors of Yahoo has acted irrationally and lost the faith of shareholders and Microsoft,” Icahn’s letter to Bostock begins. “It is quite obvious that Microsoft’s bid of $33 per share is a superior alternative to Yahoo’s prospects on a standalone basis. I am perplexed by the board’s actions. It is irresponsible to hide behind management’s more than overly optimistic financial forecasts. It is unconscionable that you have not allowed your shareholders to choose to accept an offer that represented a 72% premium over Yahoo’s closing price of $19.18 on the day before the initial Microsoft offer. I and many of your shareholders strongly believe that a combination between Yahoo and Microsoft would form a dynamic company and more importantly would be a force strong enough to compete with Google on the Internet.”

That last sentence again points out what is wrong with this mentality. The perpetrators of this type of capitalism see evil everywhere except where they should…in their own actions. The purpose of any company is to do more than rape the public for the benefit of the stockholders.

The problems that Yahoo has experienced show precisely why it is hard for some companies to go public, because when that happens, the vultures and idiots (perhaps one and the same) start circling.

Backing Icahn up in his plan to reshape the online landscape are some powerhouse names, including Nextel founder John Chapple (reportedly one of Microsoft’s choices for its own would-be proxy slate), legendary mutual fund manager Brian Posner, New Line Cinema Co-chairman and Co-CEO Robert Shaye, former Universal Studios chief Frank Biondi — one of Hollywood’s most respected former executives — and another billionaire investor-slash-household name, Dallas Mavericks and HDNet owner Mark Cuban.

Also on that list is Icahn himself, of course. It wasn’t stated who would necessarily be elected chairman of that board, though it’s a fair bet that Icahn would be the leading candidate.

Icahn’s goals obviously include big short-term gains. He wants to replace Yahoo’s existing board that was opposed to a Microsoft buyout at all costs, with a team more copacetic to the notion. But the fact that Icahn’s team represents not just Wall Street investors but seasoned managers in their own right points to the possibility of an unspoken long-term goal: a big hand in the oversight of a much bigger company.

In just the last few weeks, Icahn has become a major Yahoo investor and plans to become bigger one, according to his own letter. He purchased 59 million more shares and share-equivalents of Yahoo stock, and has signaled with the US Federal Trade Commission his intention to purchase more shares worth $2.5 billion. Outside estimates are that Icahn already owns 2.5% of Yahoo, and this purchase may bring his stake up to 4% — not huge, but certainly enough to give him a platform when he addresses shareholders on July 3.

Since a Microsoft merger is the stated, outright goal of this nomination, its success would make his Icahn Capital venture a principal investor in a newly combined Microsoft Corp. Certainly some of his proposed alternative Yahoo board — including, most likely, Chapple — would be open to the notion of being seated on Microsoft’s board in a post-merger scenario.

According to a filing last February with the US Securities and Exchange Commission, Icahn Capital did not have a major stake in Microsoft, and did not hold one in Yahoo either at that time. Curiously, though, he does continue to own about a third of a billion in combined stocks in Time Warner, the parent company of AOL — which is one of the companies Yahoo was seen associating with, in order to fuel speculation about “strategic alternatives” that could thwart a Microsoft buyout.

Forcing a merger with Microsoft is merely a way for Icahn and his gang to insinuate themselves into Microsoft, so perhaps Darth Ballmer should get upset at this point. We, as viewers on the sidelines, should be at least a bit anxious, as this, for those that believe, could take Microsoft even further toward the dark side. A Microsoft - Yahoo merger by these people would yield a company that cares even less about quality of product, and only about shareholder value. It could be the start of the long, ugly collapse of Microsoft, after a few more iterations of crappy software, released on a shareholder timetable, with no care for the quality of the product.

and

“While it is my understanding that you do not intend to enter into any transaction that would impede a Microsoft-Yahoo merger,” Carl Icahn wrote Roy Bostock this morning, with his usual sense of perfect word choice. “I am concerned that in several recent press releases you stated that you intend to pursue certain ’strategic alternatives.’ I therefore hope and trust that if there is any question that these ’strategic alternatives’ might in any way impede a future Microsoft merger you will at the very least allow shareholders to opine on them before embarking on such a transaction.”

The other “strategic alternative” involves a combination or partnership with Google. Icahn wants none of that — and incidentally, he is not a major Google shareholder.

Yahoo’s current board of directors includes the managing director of Softbank Capital and former Ziff-Davis publishing executive Eric Hippeau, Activision Chairman and CEO Robert Kotick, Northwest Airlines Chairman Emeritus Gary Wilson, and Arthur Kern, the chairman of American Media which publishes the National Enquirer. Yahoo did not have a public comment on Icahn’s move this morning.

This bozo is only concerned with merging Yahoo with Microsoft. It is not because he has any grasp of the situation in ‘cyberville’. It is not for the betterment of either of these companies. It is purely for the increase in his portfolio, and the rest of the world be damned.

Need I say more?

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Quote of the day:
The danger is not that a particular class is unfit to govern. Every class is unfit to govern. - Lord Acton

Technorati Tags: Icahn,Yahoo,Microsoft,merger,corporate raider,‘Wall Street’,Gordon Gekko,capitalism

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