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Starboard's Yahoo Push Is Fund's Biggest Target — and Challenge

  • Fund pursues Web portal with relatively small 1.7% stake
  • Yahoo is already weighing options that may include a sale
Yahoo! Inc. signage is displayed at the company's headquarters in Sunnyvale, California, U.S., on Thursday, Jan. 7, 2016. Yahoo! Inc. is planning to eliminate jobs as part of Chief Executive Officer Marissa Mayer's effort to cut costs and revive growth at the struggling web portal, according to a person familiar with the matter.
Photographer: Noah Berger/Bloomberg
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Starboard Value LP has proved its mettle as an activist investor by overthrowing the board at Olive Garden’s parent company and pushing a focus on real estate at Macy’s. Yahoo! Inc. -- the latest object of Starboard’s proxy fight agitation -- presents a far bigger challenge.

The hedge fund is pursuing a full sweep of the boardroom at the Web portal with a smaller stake than at past targets -- 1.7 percent -- giving it less clout with less money on the line than some other Yahoo investors. Starboard is also taking aim at a more responsive management team than it has historically toppled, potentially making the idea that Yahoo needs new leadership a tougher sell.