Starboard: AOL’s Board Should Be Fired

Major investor Starboard Value is pushing its own slate of directors

   
Starboard: AOL’s Board Should Be Fired

tim armstrong ceo aol s Starboard: AOL's Board Should Be FiredEven though the shares of AOL (NYSE:AOL) are up about 83% this year, activist shareholder Starboard Value is still not satisfied (it has a 5.3% stake). The hedge fund is pushing to replace the company’s board with its own slate. In fact, it also has put together a 96 page presentation deck that shows what’s wrong with AOL’s management.

Keep in mind that the main reason for the stock’s surge is the sale of patents to Microsoft (NASDAQ:MSFT), which is is a one-time thing.

According to Starboard, AOL’s core business is weak. Despite massive investments in acquisitions like the Huffington Post, the display ad business is losing about $500 million a year.

Another problem is Patch, which is a set of local websites. Unfortunately, the revenues were $13 million last year — but expenses came to $160 million. And it looks like revenues could actually decline. AOL CEO Tim Armstrong, however, is remaining steadfast in his commitment to the hyperlocal news service.

 


Article printed from InvestorPlace Media, http://investorplace.com/2012/05/starboard-aols-board-should-be-fired/.

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