Is Yahoo's CEO Wasting Time and Money?

Dan Loeb is the founder of Third Point Capital, a hedge fund with a substantial stake in Yahoo! YHOO. He has been shaking things up at Yahoo by attempting to replace multiple board members. Yahoo offered Loeb the opportunity to influence two board seats. Loeb nominated himself, but Yahoo rejected his nomination. Yahoo's letter stated, “Mr. Loeb himself does not bring the relevant skill set and experience to the board.”

Loeb then brought the skill set of Yahoo's CEO, Scott Thompson, into question. SEC filings stated that Thompson had accounting and computer science degrees from Stonehill College, but Third Point found that he had a degree solely in accounting. Yahoo then confirmed this claim.

Last Friday,Third Point responded with a letter requesting that Yahoo fire Thompson by Yesterday. When Yahoo did not comply, Third Point released a letter stating that it completed filings to view books and records associated with Yahoo's hiring of Thompson and selection of some board members. Today, board member Patti Hart announced that she plans to step down from the board. Yahoo then announced in today's release that it would form a special committee to review Thompson's credentials.

Benzinga reached out to Eric Jackson, founder of Ironfire Capital and noted critic of technology companies, to gather his take on today's news surrounding Yahoo.

“I wish that they didn't have to spend the time and the money to do this committee. It would be nice if Thompson would just step forward and say ‘This is what happened,'” discusses Jackson. “He doesn't seem to have a good explanation for the falsehoods.”

“Even though it is distracting to replace a CEO, I think in this case it will be a lot worse if they don't replace him, in the longer term,” adds Jackson. “It will upset morale internally. I think it will have a more destabilizing effect if they don't do anything than if they do change him."

"He shouldn't waste any more time and shareholders' money," attests Jackson. ”The sooner they make the change and move forward, the better off everyone will be.”

If Loeb were to achieve more influence over Yahoo, he could bring in a new CEO to initiate a core business turnaround, says Jackson. Moreover, Jackson continues, “I think he could also be very helpful in relation to [Yahoo's] outside investments in Alibaba and SoftBank.”

Shares of Yahoo were trading for $15.36 at today's market close, up $0.01 for the day.

Disclosure: At the time of this writing, I did not own shares of any companies mentioned in this post.