Yahoo! faces a possible mutiny from angry shareholders at its May 15 AGM, who have been critical of CEO Jerry Yang's handling of bid talks and the rejection of Microsoft's final and improved $47.5bn offer.
One shareholder Eric Jackson, president of hedge fund Ironfire Capital, told The Associated Press: "We are hoping to turn that [meeting] into 'Independence Day' for Yahoo's shareholders."
He has accused the Yahoo! board, led by Yang, of misreading the situation and for pushing Microsoft for too big a price.
Microsoft originally offered $31 a share before improving its offer to $33; the board asked for $37 -- a height the internet firm's shares have not hit for two years.
Jackson said: "It's hard to believe the board could let this happen. I think they completely misconstrued the situation and thought, 'Microsoft is rich, so let's soak them'.
"They were bluffing all the way and got caught."
Ironfire Capital only owns a handful of Yahoo! shares, but the company could lead other hedge funds in running a campaign to push a deal with Microsoft. Jackson has a track record with Yahoo!, having been involved in the campaign to unseat former Yahoo! CEO Terry Semel.
Speaking to Reuters, Jackson said: "I'm mad. Yahoo!'s rejection was not in the best interests of shareholders, and the board needs to be held accountable."
The belief that a deal can still be done with Microsoft has kept some buoyancy in Yahoo!'s shares as they rose yesterday hitting $25.72, having sunk 15% after Microsoft CEO Steve Ballmer called the deal off.
Shares in Yahoo! were trading at just $19 when Microsoft made its move three months ago.
Jackson has just over a week to organise ahead of Yahoo!'s delayed annual meeting on May 15. He can use that meeting to propose a slate of directors and he is reported to have already approached a number of "well-known and credible" candidates.
AP reported that two possible allies for Jackson are two of Yahoo!'s largest shareholders: Capital Research Global Investors and Legg Mason. These two shareholders both voiced public disappointment at Yahoo!'s board's demand for $37 per share.