In a transaction we previously discussed here, Expedia(EXPE) will complete the spinoff of TripAdvisor(TRIP) on or around December 20. Immediately prior to the spin, Expedia will execute a 1 for 2 reverse split, and on December 20,
TripAdvisor will be added to the S&P 500, replacing Tellabs(TLAB). Expedia, itself spun off several years ago by Barry Diller’s IAC(IAC), will remain in the index. The content-rich TripAdvisor has a faster growth rate then Expedia, and its business model is less threatened by Google’s purchase of ITA software. At 10-12 times forward EBITDA, it seems an interesting purchase. At the same time, if Expedia suffers a decline post-spin, its solid bookings business may be worth another look.
Disclosure: Author holds no position in any stock mentioned.
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