Carl Icahn Buys Almost 7 Million Additional Shares In Yahoo!

Posted Nov 28, 2008

Carl Icahn, board member of Yahoo! Inc. (NASDAQ:YHOO) has decided to buy millions of additional share in the search engine company.  Now Carl Icahn owns 75.6 million shares.  According to paidContent, Icahn “acquired 3,697,181 shares at $9.7988 per share Monday, 2,704,780 shares at $9.9678 Tuesday, and another 376,843 shares at $9.9988 Wednesday.”  Icahn now owns 5.5% of Yahoo!

Three Possible Reasons Why:
Why would Icahn buy so many shares when so many people are wanting to cash out as Yahoo!’s stock is steadily declining?  AllThingsD believes that the investment may be related to an upcoming CEO selection that Icahn favors.

Another theory is that Icahn believes in the long-term prospects of the search engine company.  Even without a Microsoft acquisition and a Google partnership, Yahoo! could still turn around.  Icahn is still on a quest to strike some sort of deal with Microsoft even if it is a search engine partnership.  Yahoo! has been through a lot of downs this year, perhaps we’ll see them become more aggressive.

And then of course there is the basic rule of finance: Buy low, sell high.  Icahn bought all of the additional shares at under $10.  When Microsoft made the bid to acquire Yahoo! earlier this year, the stock jumped up to nearly $30.  Today Yahoo! closed at around $11.51 so the investment is already starting to pay-off.