Activist buys up stake in Yahoo, slams board

September 8, 2011 - 12:30 PM

LOS ANGELES (AP) — An activist investor has bought a 5.2 percent stake in troubled Web portal Yahoo Inc. and released a public letter Thursday calling for sweeping changes to the board.

The letter from Daniel Loeb, chief executive of investment adviser Third Point, comes after Yahoo's board fired CEO Carol Bartz on Tuesday after 2 1/2 years on the job.

Loeb says the board made a "serious misjudgment" in hiring Bartz in the first place and criticized it for taking so long to fire her given her "abysmal performance."

He also says the board made a "gross error" in turning down Microsoft's takeover bid in 2008 for $31 a share.

Yahoo shares jumped 39 cents, or 2.9 percent, to $14 midday Thursday after the letter was released.