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AOL Shareholders Upset Over Exec Departures
Posted February 7, 2012
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By Alexia Tsotsis
An inordinate amount of business deals with telling stories about the future. The reason Yahoo's (YHOO) market cap is down to $19.83 billion from a high of $55 billion is because shareholders don't believe that it has a future. The reason Aol (AOL) bought Bebo for $850 million (a little over half of Aol's current market cap!) is that at the time it essentially believed - after processing analysis and reports, of course - that it was worth that much ...
Last night I read this report that a small investment firm was pleading with Aol to get its act together; "The current market price of Aol fails to reflect the substantial value of the some-of-its parts. [sic]" And then Skyped a friend, "And so it begins.* " *It being the inevitable dissolution of the company that actually pays my salary. SHUDDER.
This morning Business Insider published a pretty impassioned letter penned by what has to be the most eloquent scribe at Aol investor Starboard Value LP. In the letter, Starboard expressed concern about the estimated $500 million dollar a year losses and unmitigated failure of the company's Display business and media aspirations.
Executive Starboard summary:
This level of losses in a business that already has reasonable scale is extremely troubling. We are not alone with regard to our serious questions and concerns relating to the Company's investment in its Display business. It is clear that the losses from the Display business are having a negative impact on the overall value of Aol. READ FULL ARTICLE HERE
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