AOL Drops After Warding Off Challenge From Starboard
AOL Inc. (AOL) dropped the most in more than two months as traders anticipated activist shareholder Starboard Value LP may sell its stake in the Internet company after failing today to shake up the board.
AOL fell 5.6 percent to $25.57 at the close in New York, for the biggest drop since April 10. The stock has gained 69 percent this year.
Starboard, AOL’s fifth-largest shareholder, fought to install three directors, saying existing members supported a failing strategy. AOL’s slate of board nominees won support from investors at the annual meeting in Boston, the company said in a statement today. The vote count is preliminary.
“Event-driven traders are exiting ahead of Starboard’s likely exit,” David Joyce, a New York-based analyst with Miller Tabak & Co., wrote in an e-mail.
Starboard, had a 5.3 percent stake in the New York-based company as of April 26, according to data compiled by Bloomberg.
Daniel Gagnier, a spokesman for Starboard, declined to comment on whether the fund will sell down any of its stake in AOL.
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