ValueYahoo.com – the latest in a
number of activist campaign sites – marks a step up in quality from the
Fortunately for embattled web company Yahoo!,
does not show up in the first page of search results. The site is the latest
move by Daniel Loeb, manager of hedge fund Third Point, in is proxy campaign
against the company, and it shows what’s possible when an activist investor
wants to take his or her message online.
Setting up a site is nothing new – several such campaigns already exist –
although their effectiveness has yet to be determined. What makes Loeb’s
endeavor powerful, however, is the effort that has gone into it.
Is this an escalation in online tactics for rallying shareholders? Most
campaign websites appear to have been slapped together with little effort or
expense. A little commitment, though, can go a long way. Here we review five
activist campaign sites.
1. Enhance ITEX
A group of activists led by David Polonitza, chief operating officer of AB
Value Management, looked to unseat two of ITEX Corp’s directors last year.
They set up
to support their cause.
While the message is clear, Enhance ITEX does not have the production values
you find at ValueYahoo.com. The design is sparse, lacking any visual appeal.
It offers information about Polonitza’s nominees for the board, access to
past press releases and SEC filings, and a contact email. But there’s little
inducement to take action.
Enhance ITEX's basic homepage
2. Enhance Cracker Barrel
Enhance Cracker Barrel,
an activist website created by Biglari Holdings, resembles Enhance ITEX in
more than just the name. Biglari, Cracker Barrel’s largest shareholder when
the website was set up last year, hoped to take a seat on the board.
The most important feature on Enhance Cracker Barrel isn’t technological.
Rather, it’s the content. Biglari strikes an authentic tone, indicating –
even emphasizing – the limited objectives of his campaign.
While the design is weak, the website provides easy access to both letters
to management and letters to shareholders. Using what look like ads on the
website, Biglari offers access to online voting and a Glass Lewis proxy
Enhance Cracker Barrel makes a personal appeal
3. CP Rising
Where Enhance ITEX and Enhance Cracker Barrel fall short,
succeeds. Launched by Pershing Square, this hedge fund campaign website
clearly tries to make a case to Canadian Pacific Railway’s investors with
positive messages. Pershing Square is looking to put six people on the board
of directors, only two of whom are affiliated with the hedge fund.
CP Rising also differentiates itself with its strong design and rich media.
The fund has posted a two-hour webcast to the campaign site, along with a
presentation outlining Pershing Square’s objectives.
CP Rising utilizes positive messages
4. Shareholders for Baja
Mount Kellett Capital Management used
Shareholders for Baja
to push its campaign online against the Canadian miner. The website provides
a wealth of information about what Mount Kellett perceives as the company’s
‘web of conflicts’ of interest, even using a chart to illustrate them for
website visitors. The campaign’s goals included adding two new independent
directors to the board.
Like Enhance Cracker Barrel, Shareholders for Baja uses what resembles an
online ad to make it easy for shareholders to vote online. The news section
is much richer than most of the other activist sites, with both news
coverage and press releases available.
Although the design falls short of professional standards, the visual impact
of the ‘web of conflicts’ chart, along with the incendiary page title,
demonstrates the approach necessary for catching a visitor’s attention.
Shareholders for Baja has a rich news section
5. Value Yahoo
The travails of Yahoo!’s board of directors have been well documented. The
board is in rough shape, and the struggle with investors has been both
profound and public. Third Point is leading the charge. It has a 5.8 percent
stake in Yahoo! and offers a plan for change, claiming the company has a
‘tremendous opportunity’ to improve its core business, not to mention
valuable Asian assets.
certainly represents an escalation in the use of online tactics – the
campaign even has its own Facebook page. On the core website, there is
plenty of content, including analyses of Yahoo!’s business and even
info-graphics that make it easy for visitors to visualize Third Point’s
message. The design is elegant and easy to navigate. In short, Value Yahoo
is an online shareholder activist campaign for an online world.
Value Yahoo looks good and is easy to navigate
Activist campaign websites may have been nothing more than online billboards
in the past, amplifying a message traditionally communicated through press
releases and proxy statements, but times are changing.
With Value Yahoo, the full potential of taking a proxy battle online has
been revealed. While this approach does take investment of both capital and
time, the potential for impact is far higher.
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