UPDATE, 12:45 PM: Here’s Yahoo’s response to Daniel Loeb: “As we have previously said, the board is reviewing this matter and, upon completion of its review, will make an appropriate disclosure to shareholders.”

PREVIOUS, 12:11 PM: Third Point CEO Daniel Loeb, who owns 5.8% of Yahoo‘s stock, made his demand following the revelation yesterday that the company’s proxy and web site inaccurately described Thompson’s college credential. Yahoo said that he had a bachelor’s degree in accounting and computer science from Stonehill College. But it acknowledged that it made an “inadvertent error” after Loeb checked and discovered that the school didn’t offer a computer science major when Thompson graduated. Loeb says today, in a letter to the board, that the company’s response was “the height of arrogance” — belittling the likelihood that Thompson misrepresented his qualifications, and that the board didn’t double check his information. “Mr. Thompson and the Board should make no mistake: this is a big deal,” Loeb says. “CEOs have been terminated for less at other companies.” He wants the board to fire Thompson “for cause immediately given his demonstrable unsuitability to remain Chief Executive Officer and a director of Yahoo!” If that’s not done by noon ET on Monday, then  “Third Point will consider it grounds for further action.” Loeb has been lobbying for the company to offer board seats to himself and three allies — corporate restructuring expert Harry Wilson, media consultant Michael Wolf, and former NBCUniversal CEO Jeff Zucker. “We are prepared to join immediately,” Loeb says. They would help to “find Yahoo! a new leader with the qualifications and integrity to lead the Company and install best practices of corporate governance.” He adds that Yahoo “can ill afford to continue this misguided fight with its largest outside shareholder while it has so many other fires to put out. There has been enough damage already.”