Parsing Bostock: Let the Record Show that We Dispute Carl's Accusations

The Yahoo rapid response team has gotten no rest lately, as yesterday Carl Icahn used the newly released lawsuit details to launch another flaming arrow into one of the wagons circled up in Sunnydale. Once again, Icahn's heat required some translation.

A similar parsing of Yahoo's relatively quick response letter reveals a statement that seems more intended for submission in the courtroom than for actually influencing the coverage.

Here it is.

Bostock: Dear Carl:

Translation: Quit calling me Mr. Bostock.

Bostock: We are in receipt of your letter of June 4th and take issue with its content.

Translation: We saw the Yahoo Alerts long before we saw the actual letter.

Bostock: Your letter seriously misrepresents and manipulates the facts regarding the recent events pertaining to Microsoft and Yahoo!.

Translation: If we don't challenge your accusations, then the plaintiffs will argue that we tacitly confirmed them.

Bostock: You rely on, as "facts," a series of unsubstantiated allegations from a complaint filed in a Delaware court which grossly misstate the very clear record and position established by the Yahoo! Board.

Translation: We know how to use sarcastic quote-marks as well.

Bostock: Let me elaborate:

Translation: You might want to take a seat. This could take a while.

Bostock: You make reference to our employee retention plan but you significantly mischaracterize its purpose and its effect.

Translation: It was not, as you accused, a "doomsday device." Our doomsday device is actually down in the basement, behind the stairs.

Bostock: In fact, you refer to it as a "Poison Pill" which could not be further from the truth. To set the record straight, the employee retention program is designed to protect the Company's assets and value during a time of uncertainty.

Translation: ...and to gut the Company's assets and value if there's a change of control.

Bostock: The claim that the plan gives each of Yahoo!'s employees "the right to quit his or her job and pocket generous termination benefits at any time during the two years following a takeover..." is just plain wrong.

Translation: Just plain wrong... technically.

Bostock: In fact, our plan has a "double trigger" which means that in order for an employee to be eligible for benefits under our plan, there would need to be a change of control AND the employee would need to be terminated "Without Cause" or resign for "Good Reason."

Translation: You'd be amazed at what a great job performance scores our people have been getting lately.

Bostock: That means that in contrast to your assertions, an employee who simply quits his or her job would receive nothing under our plan.

Translation: But you couldn't move a single cubicle partition without triggering a stampede.

Bostock: The retention plan is intended to help us preserve and enhance shareholder value by allowing Yahoo! to continue to attract and retain the industry's best talent, and to allow employees to stay focused on implementing Yahoo!'s business strategy.

Translation: That's why we didn't tell them about it. We wanted them to stay focused.

Bostock: In fact, the plan was adopted in order to protect the value of Yahoo! in anticipation of a possible acquisition by Microsoft which would have resulted in a lengthy regulatory review and a significant period of uncertainty for our employees.

Translation: Just think of the uncertainty we've spared our employees the past few months.

Bostock: In adopting this plan, we believe Yahoo! did the right thing for its employees and its shareholders alike.

Translation: As long as the shareholders are also employees.

Bostock: This plan was fully disclosed at the time of its adoption and should be no surprise to anyone at this point. It was disseminated to employees, publicly filed and extensively covered by the media.

Translation: You can Google it if you want. Uh, never mind.

Bostock: Significantly, as you note, Microsoft had indicated that it was prepared to spend $1.5 billion on retention incentives indicating that they too recognized that the retention of Yahoo! employees would have been critical if there had been an acquisition.

Translation: Apparently the poison pill wasn't poisonous enough.

Bostock: Finally, you significantly misrepresent the events of the recent past. Notably, you accuse us of turning down a $40 per share offer and "sabotaging" a $33 per share offer. Again, this is patently untrue. Yahoo!'s Board of Directors has at all times been focused on maximizing shareholder value.

Translation: Should we have patented "untrue" when we patented "Panama?"

Bostock: As has been well documented, Yahoo! has engaged in thorough discussions with Microsoft over a series of months culminating in Microsoft's decision to walk away from a potential acquisition of Yahoo!.

Translation: Our CYA documentation is impeccable.

Bostock: Throughout this process, which has included an exploration of multiple strategic alternatives with multiple parties, the Board has repeatedly stated that it is open to any transaction, including a sale to Microsoft, as long as it is in the best interests of shareholders.

Translation: We've now got a hot-key for the phrase "best interests of shareholders."

Bostock: You seem to be under the impression that somehow Microsoft will come back to the negotiating table for a full acquisition of Yahoo!.

Translation: You seem to be under the impression that somehow Microsoft no longer trusts us.

Bostock: This is puzzling as I know you are aware that we have reached out to Microsoft proactively and met with them many times in the last several weeks.

Translation: Even though Jerry told everyone in Carlsbad that they reached out to us.

Bostock: During this period, their message to us and to the markets has been and remains that they are not interested in pursuing a full acquisition of Yahoo!.

Translation: We've been ignoring that bit they always add on at the end about not ruling anything out.

Bostock: Conspicuously absent from your letter is any credible plan for Yahoo! other than a repetition of your insistence that the Company should sell itself to Microsoft.

Translation: But if you do think of a credible plan, will you let us know? We'd love to have one.

Bostock: Indeed, your stated view that "the only way to salvage Yahoo! in the long if not short run is to merge with Microsoft" demonstrates that you have no other plan and causes one to wonder what exactly would happen to our Company if you and your nominees were to take control of Yahoo!.

Translation: OK, there actually would be no wondering at all. You'd get the deal done within a week.

Bostock: Sincerely, Roy Bostock, Chairman of the Board

Translation: This is not worth $40,000 a month that you pretend is so extravagant.