Yahoo's New Numbers Problem

Sam Gustin says the flap over last Friday's Yahoo board reelection shows that investor displeasure with Jerry Yang and crew isn't going away, especially if Yahoo shares continue to trade below $20.

For those who've followed the MicroYahoogleCahn saga, last week's Yahoo annual meeting seemed sedate. Microsoft is gone, Carl Icahn was absent, and Yang and crew coasted to victory.

Now comes word that something may be rotten in Sunnyvale. Did 200 million shareholder votes go missing?

Late Monday, Gordie Crawford's Capital Research Global Investors, one of Yahoo's largest shareholders, asked for a reexamination of the vote on the grounds that its opposition to the current board may not have been fully represented in the final tally.

Capital Research, which owns over 5 percent of Yahoo shares, and its separately managed sister Capital World Investors, which owns 10 percent of Yahoo shares, had advised their funds not to vote for Yang's reelection.

Yang received about 85 percent of the tally in favor of his reelection. If all of the two capital funds' votes were correctly tallied, that would mean that virtually every other vote was in favor of Yang. Given widespread investor dissatisfaction with Yang and crew, that seems highly unlikely, Capital Research suggests.

Activist Yahoo shareholder Eric Jackson claims that nearly 200 million Yahoo shares weren't counted in last Friday's results.

Realistically, this kerfuffle may amount to nothing more than sour grapes on the part of some particularly powerful Yahoo shareholders still smarting from the fact that Yahoo, which currently trades at under $20, turned down a $33-per-share offer from Microsoft just three months ago.

Even in the dissidents' best-case scenario, a revised tally still won't change the outcome, outside of being another black eye for Yang and Yahoo.

And I think that's the point: Regardless of whether last Friday's vote was fully accurate, there is a deep reservoir of investor dissatisfaction with Yahoo over the current management and the board's performance, as well as the company's bungling of the Microsoft negotiations.

No recount is going to help Yahoo fix itself or catch up to Google.