Yahoo Inc. (NDAQ: YHOO) shares are trading lower despite news of an increased investment by billionaire activist Carl Icahn. The corporate raider had pressured the firm to sell itself to Microsoft for a substantial premium to the current market price. Since Microsoft's offer was rebuffed, shares of Yahoo have fallen sharply as the economic crisis deepened.

So, why has Carl Icahn increased his investment despite the rejected bid? Unfortunately, the actions of almost all activist investors and hedge funds are hidden, and Carl Icahn is no different. Despite the lack of information, there is no shortage of speculation on the part of shareholders and the media.

Some believe that the timing of Carl Icahn's investment may indicate a new CEO announcement may be coming up soon. Others insist that Microsoft may be ready to come back to the table to negotiate on a new price - lower than the previous one but higher than the current market price. And finally, others believe a new partnership may be in the works with Google or other players.

Some shareholders believe that Carl Icahn's motives may be more financial than activist. Currently, Yahoo shares are trading on the cheap with a lot of cash on the books and no long-term debt. Carl Icahn's purchase comes out at just above book value  while Yahoo's brands and traffic continue to remain strong.

But regardless of the motive, Carl Icahn's investment is good news for shareholders...

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