Why TripAdvisor Shares Soared

Jeremy Bowman, The Motley Fool
Updated

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of travel service TripAdvisor were getting five stars from investors, gaining as much as 23% after John Malone's Liberty Interactive purchased TripAdvisor Chairman Barry Diller's nearly 5 million shares for $62.50 apiece.

So what: Diller had acquired TripAdvisor as part of Expedia in 2004, and spun it off from the larger travel services company last year. Some are now speculating that Malone will also buy out Diller's shares of Expedia, which jumped as much as 5% on today's news. Liberty Interactive shares, meanwhile, fell more than 1%, but the deal gives the media company a majority of the voting rights of TripAdvisor.


Now what: With Malone in control of the voting rights, many observers expect him to continue building a stake in TripAdvisor, as he's done recently with Sirius XM Radio. The more than 50% premium Malone paid should indicate he'd have no qualms about buying shares at the current price, near $42. Diller will resign as chairman but remain on as director. Liberty Interactive's other media properties include Evite, QVC, and Gifts.com.

Stay connected on any further developments following the TripAdvisor-Liberty deal.

The article Why TripAdvisor Shares Soared originally appeared on Fool.com.

Jeremy Bowman has no positions in the stocks mentioned above. The Motley Fool owns shares of TripAdvisor. Motley Fool newsletter services recommend TripAdvisor. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Advertisement