Spin-Off Research In the News

Expedia: Its Pending Spinoff of TripAdvisor Seen As Bonanza For Shareholders

Posted by Emily Borderie on Tue, Aug 30, 2011 @ 09:08 AM
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It’s fair to say that these days travel sucks, if you will pardon the expression. With tight security measures at the airports, ever-rising fares, and depressed economic conditions, all the pleasures of taking a trip for fun or business is practically just a memory of the past. But it would be a mistake to conclude that there aren’t investment opportunities in the travel industry.

No, I am not recommending buying airline or lodging or hotel stocks. But in these volatile times, the market has become even more of a stock picker’s paradise. So even in the generally lackluster travel business, there are pockets of one-time opportunities to take advantage of, to make a bundle on stocks.

One that points up such a rare event is the decision in April 2011 by the global online travel service leader, Expedia (EXPE), to spin off its lucrative, high-margin TripAdvisor unit. It is Expedia’s important online travel content dispenser that provides travelers with search and directory for worldwide destinations, including guidebook reviews accompanied by opinions of actual users. And not only is TripAdvisor Expedia’s largest and most active online social network for travelers but it’s also an important driver of the company’s media and advertising operations.

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