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Benchmark's Daniel Kurnos: IAC Spinoff Of Match.com Unlocks Additional Value

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Speaking to Benzinga, Benchmark's Daniel Kurnos said that IAC/InterActiveCorp's (NASDAQ: IACI) decision to spin off the Match Group will help IAC "at least partially raise proceeds for investment in both core Match and Tinder."

Kurnos added, "I also think you have to view the announcement as a positive that Match is on track to hit their $500 million 2016 EBITDA goal."

In his research note on the topic, Kurnos said that the move was "somewhat" priced into the stock. Much more interesting, Kurnos said was the timing, which came before IAC's Google Inc (NASDAQ: GOOG) contract expired in early 2016. IAC is planning the IPO for Q4 this year.

As Kurnos noted, he believes IAC's decision should be viewed as a positive about Match's 2016 EBITDA; however, he also said that some in the market may view the timing as suspect – with IAC trying to maximize value in Match before it takes a search hit on the Google contract expiration. Kurnos dismisses this view slightly, noting that "the spin [is] a vote of confidence ahead of the upcoming Google search contract expiry early next year."

"We believe this move will ultimately unlock additional value," Kurnos said. Match could get $75-80 per share, while the Search division – HomeAdvisor and Vimeo – could get an additional $15-20 per share.

IAC has gained nearly 5 percent today on the announcement. The stock hit an all-time high of $82.40 at the open, though traded recently at $80.75. Year-to-date, the stock has gained 33 percent.

Latest Ratings for IACI

DateFirmActionFromTo
Jan 2016Initiates Coverage onPositive
Dec 2015MaintainsOverweight
Dec 2015MaintainsOverweight

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Posted-In: Benchmark Daniel Kurnos IAC/InterActiveCorp Match.comAnalyst Color Exclusives Analyst Ratings

 

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