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AOL CEO Tim Armstrong is in a fight for his job with AOL’s sixth-biggest shareholder, hedge fund Starboard.Reuters reports he has some new allies.
Starboard says AOL is blowing it, investing so much in Patch and with poor display ad sales.
Starboard’s solution is a handful of people that it would like other AOL shareholders to vote onto AOL’s board. Once on AOL’s board, these people would presumably tell AOL CEO Tim Armstrong to change course or resign.
Today, however, Reuters reporters Nadia Damouni and Jennifer Saba say that several of AOL’s other big shareholders are lining up in support of Armstrong and AOL, and that they’d like Starboard to back off.
According to three sources with direct knowledge of the situation, some of AOL’s top shareholders intend to take their concerns to Starboard, which is mounting a proxy fight for seats on AOL’s board. One of Starboard’s candidates for the board is its founder and chief executive, Jeffrey Smith.
Those concerns, the sources said, include Starboard’s slate of dissident board nominees and its increasingly hostile public campaign, which the other shareholders feel is damaging AOL’s prospects.
“Starboard is proving to be a real distraction and they are potentially destroying value to some degree,” said one shareholder, who requested anonymity.
Why are AOL shareholders so happy, suddenly?
They have 1,000,000,000 reasons.