Market Overview

Liberty Interactive Buys Controlling Stake in TripAdvisor

Liberty Interactive Buys Controlling Stake in TripAdvisor

Shares of TripAdvisor (NASDAQ: TRIP) rallied strongly higher on Tuesday after it was announced that Liberty Interactive (NASDAQ: LINTA) had purchased a controlling stake in the company. Shares were up about nine percent early Tuesday, trading near $41.90.

Liberty Interactive acquired 4.8 million shares of TripAdvisor at a cost per share of $62.50. Liberty's shareholders appeared to have liked the news, as the stock traded up following the announcement.

The 4.8 million shares were not bought at the market price, but rather from the company's (now former) Chairman Barry Diller. Diller's resignation from TripAdvisor was announced alongside the share sale.

Analysts at PiperJaffray still like TripAdvisor post share sale. They believe that the move will have “no impact on TripAdvisor operations.” Instead, they believe it to be an affirmation of the underlying strength of TripAdvisor's business, noting that it is a “sign that near-term trends in the business are solid.”

Other online travel stocks also got a boost on Tuesday. Shares of Expedia (NASDAQ: EXPE) traded up over three percent. (NASDAQ: PCLN) was not up notably higher, but was still in positive territory following a dramatic drop on Monday.

The move comes just a few weeks following Priceline's surprising acquisition of Kayak.

The online travel space has been a profitable sector for investors this year. Year-to-date, shares of Expedia are up over 100 percent. Meanwhile, Priceline, even including the recent drop, is still up well over 35 percent.

Kayak didn't even get a full year of independent returns, as the company had only gone public in July. However, if investors had bought into Kayak on its first day of trading, they would have netted a solid return of about 30 percent.

Posted-In: Analyst Color News Management M&A Intraday Update Analyst Ratings Movers Trading Ideas Best of Benzinga


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