Special Reports
Billionaire T. Boone Pickens Loses Millions on Yahoo Gamble

By Yi-Wyn Yen
July 29, 2008

Oil billionaire T. Boone Pickens has decided he is not going to follow activist
billionaire Carl Icahn to the ends of the earth.

Pickens told the San Francisco Chronicle that he has sold his 10 million shares
of Yahoo (YHOO) for a loss because he doesn’t believe a sale to Microsoft (MSFT)
is happening.

Pickens bought the shares in the hopes that Icahn would succeed in getting
Yahoo’s board to agree to a sale to Microsoft. The octogenarian admits he
doesn’t know how to “write an email” and decided to blindly follow Icahn’s lead.

“He goes in first and I jump in behind him,” Pickens told CNBC in an interview
in late May.

Icahn’s plans to sell the tarnished Internet portal to Microsoft for a profit
have not succeeded. The corporate agitator launched a proxy campaign in hopes of
winning control of Yahoo’s board, but Microsoft has said the company is no
longer interested in buying all of Yahoo for $33-a-share. Earlier this month
Icahn reached a compromise with Yahoo’s board to forgo his proxy fight in
exchange for three seats on Yahoo’s board. Yahoo will holds its annual
shareholder meeting on Friday, where investors will vote for an extended
11-member board.

Now that the fight’s over, Pickens has decided to cut his losses. “I think that
[the] Yahoo management was pathetic,” Pickens told the Chronicle. Pickens did
not say how much he has lost in his activist gamble.

Though the most recent regulatory filings don’t show Pickens’s selloff, it’s
likely that Pickens has lost roughly $50 million. He bought his shares in the
first few weeks of May when Yahoo was trading between $25-$27. In the past two
weeks, Yahoo’s stock has slipped to between $20-$22.


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