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Is the TripAdvisor Spin-Off a Lousy Destination? By Louis Bedigian Benzinga Staff Writer December 21, 2011 2:59 PM Expedia's popular travel website, TripAdvisor, is now trading on its own. Should investors care? At the time of this writing, Google (NASDAQ: GOOG [FREE Stock Trend Analysis]) doesn't seem to care. A quick Google Finance search for TripAdvisor (NASDAQ: TRIP) brings up an old, out-of-date listing for some pink sheets corporation called TravelBuys, Inc. As you can see, investors are very excited for TravelBuys' potential: Note the sarcasm. There was some additional confusion when TripAdvisor was thought to be trading under the ticker TRIPV. But if you enter that ticker into Yahoo! (NASDAQ: YHOO) Finance now, you will be redirected to the proper page. “This is a truly exciting time for TripAdvisor, and we are eager to continue to innovate on behalf of our users and grow the business as we enter this next chapter,” Stephen Kaufer , co-founder and CEO of TripAdvisor, said in a company release. “TripAdvisor's spin-off and membership in the S&P 500 both represent major company milestones, and is also a testament to our community and the value of user generated content.” What has come of the stock since its debut this morning? Just as Zynga (NASDAQ: ZNGA) crashed and burned last Friday (and continues to decline on a daily basis), TripAdvisor fell from its roughly $30 debut at 9:30 a.m. to $28.79 at 10:13 a.m. Within the following 10 minutes, the stock inched back up past the $29 mark, then gradually fell back down to the $28 level, where the stock has mostly remained. Unless something drastic occurs, it is unlikely that TripAdvisor will be able to close at anything other than a loss. Whatever happens, you can be sure that Benzinga Pro will bring you the latest updates faster than any other newsfeed. Expedia (NASDAQ: EXPE), on the other hand, is on the rise this afternoon. The company had a rough start to the year, going from $27.30 on January 14 to $25.16 on January 31. The stock continued to decline, dropping more than 20% during the second week of February. Expedia finally bottomed out on March 1, closing at $19.69. From then on, the stock rose pretty steadily, even during the volatile spring and summer months. But once August hit, Expedia was faced with another sharp decline, which was followed by a continuous, roller coaster-worthy cycle of ups and downs. This is still a better outcome than the pain Expedia and its former parent company, IAC/InterActiveCorp (NASDAQ: IACI), endured after Expedia went public in 2005. At that time, both IACI and EXPE dropped, CNNMoney reported. At least in this scenario Expedia is doing well, even if TripAdvisor is not. But you have to wonder: what does IAC hope to accomplish with its continued effort to spin-off corporations, which then go on to spin-off other corporations? Why not build up the best single entity and see where its stock can go? Instead, these companies would prefer to build up the values of as many small entities as possible, which can trade for lower amounts individually than they would as one unit with IAC, which could make them more appealing to investors. Still, I'm not sure IAC has made the right decision here. Is it a coincidence that the company chose to spin off Expedia after the stock took a serious hit in 2004? Up until that point, IAC was on the rise. It peaked in July 2003 at more than $161 per share. Twelve months later, the stock had lost roughly a third of its value. By August 2005, IAC had lost another two-thirds of its value. The stock continued to fall and dropped to a new low with the financial crisis in 2008. Since that time, IAC has only experienced a moderate recovery. Similarly, Expedia was struggling to recover when the company announced that it would spin-off TripAdvisor. Is this one great big coincidence? Or is this what IAC and its former subsidiaries like to do – spin-off assets and start new publicly traded companies whenever times are tough? Read more: http://www.benzinga.com/trading-ideas/long-ideas/11/12/22231… |
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| aus der Diskussion: | Tripadvisor - spin-off von Expedia |
| Autor (Datum des Eintrages): | R-BgO (24.12.11 17:59:53) |
| Beitrag: | 1 von 71 (ID:42520757) |
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