With financial institutions imploding in a wave of writedowns -- and executives who delivered mind-bogglingly bad performance walking away from the wreckage with millions -- Carl Icahn is seizing on the current environment to push his agenda on corporate governance reform.

Icahn announced today that he is forming United Shareholders, a lobbying group, to push for legislative reform that would outlaw shareholder-unfriendly corporate bylaws like poison pills and staggered boards.

Lobbyists get a lot of bad press, but this sounds like one effort that will actually be promoting the interests of ordinary investors. In recent months, we've seen the dangers of bad governance and poorly-aligned pay packages that induce executives to take excessive risks.

It seems that Icahn, who has spent most of his life building one of the largest fortunes in the world, is now looking out for his legacy. If Icahn's lobbying and blogging efforts have any effect on the way companies are run, it will be a good one.

ImClone Systems Inc. (NASDAQ: IMCL) had good results today, with shares closing up 6.7% at $67.94. The biotechnology company rejected Bristol-Myers Squibb (NYSE: BMY)'s offer to buy the remaining 83% of the company at $60 a share, saying it is considering a buyout offer worth $70 per share from an unidentified large pharmaceutical company. It seems that chairman Icahn has been busy.

To be sure, I was one of the skeptics when the billionaire investor last rejected BMY's offer, as was my colleague Doug McIntyre. But if this new offer is for real, then I must admit I underestimated him. Apparently, he "has been in talks with the chief executive of the pharmaceutical company that made the new offer, which would be worth about $6.1 billion." ImClone said it has not decided if the offer is adequate -- talk about playing hard ball all the way.

Bristol-Myers is ImClone's partner in selling its only product, the colon and head-and-neck cancer drug Erbitux. Analysts believe this would force BMY to offer $70 as well. A partnership between BMY and ImClone makes sense strategically. But I guess it all depends on who is the other pharmaceutical company BMY is competing with. Many pharma companies are losing sales to generic companies as their drugs go off patent, and without having much in the pipeline, but enough cash on their hands, any of them could be an interested buyer.

Some specific names mentioned by analysts include Sanofi-Aventis (NYSE: SNY), GlaxoSmithKline PLC (NYSE: GSK) and possibly AstraZeneca PLC (NYSE: AZN). Germany's Merck KGaA, which already sells Erbitux in some countries outside North America, is another likely candidate, as is Pfizer Inc. (NYSE: PFE), which has been trying to expand its portfolio of oncology drugs.

It's interesting that negotiations with the other company have been kept so tight, except for the price of course. BMY wins either way -- even if it can't get ImClone -- as it still holds 17% of BMY shares. Icahn, of course, would be a big winner too. Other options ImClone has been entertaining was spinning off the Erbitux division into a separate firm. The parent company would focus on developing drugs in its pipeline.

Shares of Biogen Idec Inc. (NASDAQ: BIIB) plummeted on news that its multiple-sclerosis drug Tysabri was linked to brain infections causing death, leaving 4.3% shareholder Carl Icahn with a hefty paper loss.

But Icahn didn't back down. Having already pushed for one unsuccessful effort to sell the company, and having lost a bid for three seats on the board of directors, Icahn filed a 13-D announcing that he had raised his stake to 6.1%, buying in the wake of the brain infection announcement.

As one of the smarter activist value investors going, Carl Icahn's moves are closely watched by investors looking to piggyback off his ideas.

In June 2000, Richard Wagoner became president and CEO of General Motors Corporation (NYSE: GM) In case you haven't been paying attention for the last eight years, here's an overview of what's gone down:

• GM paid huge dividends even as its pension and health care obligations spiraled out of control leaving the company in a precarious capital position.

• When SUVs started to get hot, GM essentially bet its future on the continuation of that trend and the reasonably low gas prices that made it possible. That's right: GM was essentially an commodities speculation hedge fund masquerading as a car company. Now Bloomberg is reporting that GM lost $2 billion on leased SUVs.

• Now that gas is at $4 per gallon and M&A activity has dried up, GM has decided that this is a good time to try to sell its Hummer brand. Does it come with Pogs, Pokemon cards, and HD DVD?

• The stock was trading in the $60 per share range when Wagoner took the helm and now it's fallen to $11.07 and Merrill Lynch is saying that a GM bankruptcy is "not impossible." And remember: Merrill Lynch has been overly optimistic about its own ability to survive without raising capital. So "not impossible" may very well mean "quite possible."

Given all that, I have a serious question for General Motors' board of directors: How can Richard Wagoner possibly still be your CEO? Hypothetically, what would he have to do to get fired? Join Al Qaeda? In 2007, Wagoner took home $14,415,914, a 41% raise over 2006.

The fact that Carl Icahn isn't filing a 13-D and raising hell is indicative of the fact that this is one company that's probably too late for saving.

Yahoo, Inc. (NASDAQ: YHOO) is out with numbers and it appears that while there is a bit of growth, it's nothing to write home about. According to the Business Wire report: " Revenues were $1,798 million for the second quarter of 2008, a 6 percent increase compared to $1,698 million for the same period of 2007. "

Keep in mind that with the big shareholder meeting set for August 1st, don't you think the company would have done all they could to deliver a super earnings report? If this is the best that they can do, 6% revenue growth, then something is very wrong with management, and Carl Icahn is going to have a much easier job of trying to replace CEO Jerry Yang. With shares trading at about $20, they are going to have to do some fancy talking to show why rejecting a $31 to $33 per share offer from Microsoft Corporation (NASDAQ: MSFT) was actually good for shareholders.

The company keeps talking a good game and about future growth, but it comes down to just one principle for investors: Show us the money.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 7/22/08.

Today was light on the economic front as far as impact numbers. The June leading economic indicators were down at -0.1%, and the May gain of +0.1% was revised lower to -0.2%. This shows little argument for a strengthening economy. Oil showed how it can still rise as tropical storm Dolly is in the Gulf of Mexico and no deal was reached with Iran, with prices back above $131.00 per barrel. Today was looking like a gain at the start, but the market slid as the day went on.

Below are today's unofficial closing bell index levels:

DJIA 11.467.67 (-28.90)
S&P 500 1259.72 (-0.96)
NASDAQ 2279.69 (-3.09)
10 YR T-NOTE 4.067% (-0.014%)
52-WEEK LOWS
Top Analyst Calls

Bank of America Corp. (NYSE: BAC) showed a more than 4.6% gain at $28.80 in today's final minutes after the earnings report this morning came in far above lowered expectations. This stock is now up over 50% in a few days.

Reuters reports that Yahoo Inc. (NASDAQ: YHOO) has announced that it will add activist investor, Carl Icahn, who owns 5% of Yahoo stock, to its board. Why?

Yahoo's board picked what it thought was the lesser of two evils. It could have spent time on a proxy contest in which Icahn's slate of directors would replace the current board at the August 1 shareholders meeting, or it could just expand the board from nine to 11, taking on Icahn and two others from his slate, since only 8 of Yahoo's current directors are standing for reelection.

This reminds me of a line from The Godfather: "Keep your friends close, and your enemies closer." I don't know the way the Yahoo board makes decisions but if Icahn can't persuade at least three other of its current board members to go along with him -- to get a 6-5 majority -- he is likely not to have much of an impact on Yahoo's fate.

And so the drama continues. Meanwhile, investors have traded Yahoo down 1.7% in premarket.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Yahoo securities.

Yahoo! (NASDAQ: YHOO) shares are falling today after billionaire investor Carl Icahn criticized YHOO's board, accusing it of neglecting to disclose critical details of Microsoft's (NASDAQ: MSFT) buyout offer. Icahn also filed a proxy on Monday to nominate a slate of nine directors to replace YHOO's board and chief executive officer. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on JPM.

After hitting a one-year high of $34.08 in October, the stock hit a one-year low of $18.58 in January. This morning, YHOO opened at $23.12. So far today the stock has hit a low of $22.22 and a high of $23.24. As of 1:25, YHOO is trading at $22.40, down $1.17 (-4.9%). The chart for YHOO looks bearish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bearish hedged play on this stock, I would consider an August bear-call credit spread above the $27.50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 11.1% return in five weeks as long as YHOO is below $27.50 at August expiration. Yahoo! would have to rise by more than 22% before we would start to lose money. Learn more about this type of trade here.

YHOO hasn't been above $27.50 since late May and has shown resistance around $24.50 recently. This trade could be risky if the company ends up agreeing to a deal with Microsoft in the coming month, but even if that happens, this position could be protected by resistance YHOO might find at its 200 day moving average, which is currently around $26.50 and falling.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in YHOO. He does own and control bullish hedged positions in MSFT.

Here is a novel idea. Big Yahoo! (NASDAQ: YHOO) shareholder Legg Mason thinks more investors would support Carl Icahn's effort to control the portal company if the raider will not sell out to Microsoft or anyone else for under $33. At $32.99 it's no deal.

Legg Mason's Bill Miller told Reuters, "The difficulty with Icahn is he'd have more shareholder support if he would say he wouldn't sell the company for less than $33."

Fair enough. One of the problems with hooking up with raiders is that they often fail. Microsoft (NASDAQ: MSFT) has already indicated it would pay $33 for Yahoo!. Why should shareholder take less?

Miller may be thinking of Icahn's recent deals to pressure Motorola (NYSE: MOT) and Blockbuster (NYSE: BBI) to improve "shareholder value". Neither one of those have done well. Investors who followed Icahn in have lost plenty of money.

Legg Mason's comment makes sense. "Put up or shut up:"

Douglas A. McIntyre is an editor at 247wallst.com."

MAJOR PAPERS:

• Corporate advertisers are not flocking to YouTube despite the fact that the video sharing site attracts one billion views a day, upsetting Google Inc's (NASDAQ: GOOG) expectations for a strong revenue stream, according to the Wall Street Journal. Total ad revenue for Google this year will be about $200M from the site, where the company is counting on growth beyond its text ads from Web searches.
• A day after Microsoft Corporation (NASDAQ: MSFT) said it would be interested in reopening talks to acquire some of all of Yahoo! Inc (NASDAQ: YHOO) if Carl Icahn's proxy battle succeeds, the Wall Street Journal reported that Yahoo! CEO Jerry Yang accused Microsoft of "trying to destabilize" the company "without a real desire to complete a deal".

OTHER PAPERS:

• The Atlanta Journal Constitution reported that Comair, a subsidiary of Delta Air Lines Inc (NYSE: DAL), is set to cut 300 pilots and 220 flight attendants from its staff. The paper said the layoffs will go into effect in September when Comair cuts its flight schedule as part of Delta's capacity cuts and will affect crew members based at Cincinnati/Northern Kentucky International Airport and New York's John F. Kennedy International Airport.

WEB SITES:

• Iran successfully test-launched a long-range version of its Shahab-3 missile, according to Iranian news service Al-Alam. The missile can reach U.S. military bases in the Persian Gulf and Israel.

If we told you that a $3.00-plus drop in the price of oil wouldn't cause a major stock rally, it might only not be a surprise the bears who believe we are headed lower no matter what. Today was one where the markets spent much time in negative territory and then recovering towards the end of the day before making one last dive. If you think it was a quiet day, we had nearly a 300-point difference between today's high in the morning and the lows before today's recovery. These are today's unofficial closing levels:

• DJIA 11,227.72 (-60.82)
• S&P500 1,252.64 (-10.26)
• NASDAQ 2,243.11 (-2.27)
• 10-YR T-Note 3.93% (-0.043%)
• 52-Week Lows
• Top 10 Analyst Calls

The Walt Disney Company (NYSE: DIS) saw a severe downgrade after Lehman cut it to Underweight on its premium to peers and weakness tied to Theme Park exposure. Shares were down over 2% at $30.22 in today's final minutes.

The Microsoft Corp. (NASDAQ: MSFT) -- Yahoo Inc. (NASDAQ: YHOO) merger dance is not quite over yet.

In an open letter to his fellow long-suffering Yahoo shareholders, billionaire Carl Icahn disclosed that he has spoken "frequently" with Microsoft CEO Steve Ballmer; "frequently" over the past week about Yahoo. Ballmer indicated to Icahn that the world's largest software company would still be interested in doing a deal ... with one catch.

"Steve made it abundantly clear that, due to his experiences with Yahoo! during the past several months, he cannot negotiate any transaction with the current board," Icahn said. "If a new board were elected, he would be interested in discussing a major transaction with Yahoo!, such as either a transaction to purchase the "Search" function with large financial guarantees or, in the alternative, purchasing the whole company. He stated that Microsoft would be willing to enter into discussion immediately if the new board that has been nominated were elected."

In a separate press release, Microsoft underscored Icahn's statement, adding that despite speaking with Yahoo!'s board since last year, the company decided that it cannot reach an agreement with the current board. Can you say trial balloon?

The war of words between Yahoo (NASDAQ: YHOO) and dissident shareholder Carl Icahn is intensifying. Last week, Yahoo attached a PowerPoint-style presentation to an SEC filing, bizarrely raising questions about Icahn's track record as a stock picker.

Now Icahn is back with a new letter, issued as a press release titled Icahn Issues Open Letter to Shareholders of Yahoo. Icahn confirmed that he has been in frequent communication with Microsoft (NASDAQ: MSFT) CEO Steve Ballmer over the past week. Icahn wrote that "Steve made it clear to me that if a new board were elected, he would be interested in discussing a major transaction with Yahoo!, such as either a transaction to purchase the "Search" function with large financial guarantees or, in the alternative, purchasing the whole company. He stated that Microsoft would be willing to enter into discussion immediately if the new board that has been nominated were elected."

Lest you think Icahn is blowing smoke, Microsoft followed up with a response to Icahn's statement issued five minutes later, saying, "We confirm, however, that after the shareholder election Microsoft would be interested in discussing with a new board a major transaction with Yahoo!, such as either a transaction to purchase the "Search" function with large financial guarantees or, in the alternative, purchasing the whole company."

This should sway a lot of investors over to Icahn's side in the proxy fight. With its stock having been a weak performer over the past five years, the company is clearly in a position where it needs to be considering strategic alternatives. Microsoft has made it clear that it is not interested in working with the current board on a possible deal and it's in the best interests of shareholders that the company be represented by people who are willing to do what is right for them.

I think we can start the countdown to CEO Jerry Yang's departure to spend more time with his family and charitable endeavors. The market seems to agree, with the stock up nearly 10% MOnday.

While calling Arthur Levitt's tenure as chairman of the Securities & Exchange Commission ineffective would be an understatement, he could, and still can, be relied upon to say the right thing. Now that the SEC finally has the quorum necessary to take action on a variety of issues, they should take Levitt's advice about proxy access changes.

Earlier this year the SEC made it impossible for shareholders to change the way directors are elected -- one of the most anti-investor events in recent history -- and it's time for that to change. Levitt writes in The Wall Street Journal that "While not a panacea, giving shareholders a bigger voice in the companies they own would go a long way in helping to restore trust."

Exactly. Some critics of strong corporate governance say that the SEC shouldn't meddle in these affairs. I basically agree: but the problem is that the SEC has meddled, making it impossible for shareholders to take control of their own companies when necessary.

In a PowerPoint-style presentation intended to rebuke criticism of its commitment to enhancing shareholder value, Yahoo! Inc. (NASDAQ: YHOO) attacks Carl Icahn's recent track record as an investor.

One slide points out that 11 of Icahn's 15 most recent investments in public companies have declined in value since he took his position. But what exactly is Yahoo!'s point? That Icahn is a lousy investor and probably wrong for investing in Yahoo! too? If that's the case, then they'd better sell the company while they can before it turns into another Icahn dud!