Over the last year we’ve seen a few shareholders talk about their concerns in a very public way about the companies they invest in, and looks like AOL is going through the same problems. Their largest shareholder, Starboard Value LP has shown some concern over AOL’s $500 million annual losses and 70 percent decline in stock price in 2011. Apparently Starboard wrote a nine-page letter to AOL’s CEO Tim Armstrong pointing on what they feel are problems the media company has had over the last year.
In a surprising turn of events, this has triggered AOL to issue the following statement:
NEW YORK, NY – December 21, 2011– AOL, Inc. (NYSE: AOL) today issued the following statement in response to the press release issued by Starboard Value LP:
Over the last two years AOL has significantly reduced costs, sold non-core assets, made significant investments for our future, and also recently repurchased over 10% of outstanding shares. AOL has a clear strategy and operational plan to provide our consumers and customers with exceptional value, which we believe will lead to the creation of shareholder value. Our Board and management team remain firmly committed to creating value for all shareholders and we will continue to aggressively execute on our strategy in 2012 as we continue the turnaround of AOL.
AOL has grown quite a bit over the last year, but of course that has also come at a cost of some key personal, much to Tim’s credit, AOL has been able to discover who they a really are which is a premium media publisher versus what they tried to be in the past, a technology company. There have been some moves that AOL has done over the last year that have been a bit of a surprised and made us scratch our head a bit.