Icahn's latest lament: Et tu, Legg Mason?

Heading into his big showdown with Yahoo management, Carl Icahn might have expected to have Wall Street in his pocket. Instead, he received a slap from some of his former buddies.

Charles Cooper Former Executive Editor / News
Charles Cooper was an executive editor at CNET News. He has covered technology and business for more than 25 years, working at CBSNews.com, the Associated Press, Computer & Software News, Computer Shopper, PC Week, and ZDNet.
Charles Cooper

This wasn't the sort of reaction Carl Icahn was expecting from his former buddies on Wall Street.

Legg Mason Capital Management, which controls about 4.4 percent of outstanding Yahoo stock, plans to back management at the company's shareholders meeting next month. Could it be that Legg Mason thinks he's as clueless as Yahoo claims he is when it comes to managing a complex technology company?

Bill Miller, chairman and chief investment officer of Legg Mason, said Friday in a statement that Legg Mason would prefer the feuding sides reach a settlement and "end this disruptive proxy contest."

But so much blood has been spilled that no one involved believes that scenario is likely. As a result, Miller and his company are giving the nod to Yahoo CEO Jerry Yang.

"We believe the current board acted with care and diligence when evaluating Microsoft's offers," Miller said. "We believe the board is independent and focused on value creation for long-term shareholders."

Win some, lose some. But this is a big loss on Icahn's home turf.

The guy may not know how to navigate around a personal computer, but he knows Wall Street like the back of his hand. So if Icahn, one of the guys who wrote the book on greenmail, couldn't win over one of his own--Et tu, Brute?--you have to wonder about his chances at the showdown with existing management on August 1.