This is easily translated, of course. It is estimated that Icahn paid ~$25 for his shares and he doesn’t want to lose the money he’s already lost. Icahn tried to get a Microsoft transaction going in May. Icahn disastrously failed. Now he’s looking for Yahoo shareholders to bail him out.
Yahoo is in a tough spot already. Electing the Icahn board means that you’ve got Yahoo in the same tough spot it’s already in, plus a board that has publicly said it has no intention to do anything with the company other than sell to Microsoft. This is a horrible negotiating position.
Microsoft could walk in and buy what is left for far less than $20/share. Fortunately for Yahoo shareholders, I don’t think Microsoft would do this. Out of “good will” and the interest of avoiding competing bids, they’d offer more. But if you were an employee at Yahoo, and this all happens, what are you going to do? You’re either going to quit (because the management team has publicly stated doesn’t care if you succeed or fail – they just want to use you to sell to Microsoft), or you’re going to stick around to see if you don’t get that bonus along with your pink slip.
Either way this is a bad deal for Microsoft (they pick up a bunch of assets with a completely uninspired and burned out team) and its a relatively bad deal for Yahoo shareholders. They sell out for far less than they were worth just 6 months ago, and if Microsoft really wanted to be brutal, they could end up selling for a small fraction of what they are worth right now.
The only winner: Carl Icahn – the businessman that builds nothing, takes everything, and doesn’t care about people -who makes a few extra short-term dollars per share for himself.