Expedia Has 100% Upside, The Bears Are Wrong
Nov. 6, 2015, 1:32 PM
- Priceline (PCLN -1.6%) and Expedia (EXPE -2.9%) have sold off after TripAdvisor (TRIP -6.8%) posted a Q3 miss and cut its full-year revenue growth forecast. On its earnings call (transcript), TripAdvisor stated the rollout of Instant Booking (allows bookings to be made on TripAdvisor's site/apps, Priceline recently signed up) is affecting near-term revenue by pushing out revenue recognition relative to referral (click-based) payments.
- Also: Priceline says it's uninterested in making a rival bid for top vacation rental marketplace HomeAway (AWAY -6.2%), which recently agreed to a $3.9B sale to Expedia. HomeAway has fallen to $37.73, a price close to what Expedia's cash/stock offer is currently worth.
- TripAdvisor's management faced earnings call questions about the impact of Instant Booking on monetization and conversion rates. It insisted IB, and the the Priceline deal in particular, will be a major positive. "The reason Priceline enables us to accelerate our [Instant Booking] rollout globally is because of the rich content that they have on 400,000 plus properties all around the globe, and by that I mean they are able to successfully take bookings on 400,000 plus properties in multiple, multiple, different language, processing payments for multiple different credit card by multiple different banks."
- At the same time, management is taking a cautious approach to modeling international IB sales. "[W]hile we have the decent amount of experience now in U.S. and U.K., we don't quite know how [Instant Booking] is going to flowing in, in France, in Japan, all throughout age, all throughout all the other markets that we look to roll it out in."
- Oppenheimer's Jed Kelly has downgraded TripAdvisor to Perform, citing slightly weaker hotel trends and the "monetization drag" Instant Booking could have in the near-term. Nonetheless, he thinks the Priceline deal "should eventually enhance earnings long term, especially as revenue leakage and improving mobile monetization eventually equates to higher revenue per hotel shopper."
- Priceline and TripAdvisor rallied last week in response to Expedia's Q3 results and full-year guidance hike. Priceline reports on Monday morning.
Nov. 4, 2015, 5:33 PM
- Expedia (NASDAQ:EXPE) is now up strongly after hours in response to news it's buying HomeAway (NASDAQ:AWAY) for $3.9B. HomeAway has risen to $39.26 - at Expedia's current trading levels, the company's cash/stock payout for HomeAway is worth $39.06/share. (PR)
- Expedia CEO Dara Khosrowshahi: "We have long had our eyes on the fast growing ~$100 billion alternative accommodations space and have been building on our partnership with HomeAway, a global leader in vacation rentals, for two years ... we look forward to partnering with them to accelerate their shift from a classified marketplace to an online, transactional model to create even better experiences for HomeAway's global traveler audience and the owners and managers of its 1.2 million properties around the world."
- The deal is partly seen as an attempt to counter the rise of home/apartment rental marketplace Airbnb (Pending:AIRB), which was reportedly valued at an eye-popping $25.5B in a June round. Airbnb has long been seen a threat to HomeAway (though HomeAway has insisted it differs from Airbnb due to its focus on secondary home rentals), and Expedia admitted on its Q3 earnings call Airbnb could exert price pressure in some hotel markets by increasing available room inventory.
- Earlier: Expedia buying HomeAway for $3.9B
Nov. 4, 2015, 4:21 PM
- Expedia (NASDAQ:EXPE) is buying leading vacation rental marketplace HomeAway (NASDAQ:AWAY) for $3.9B in cash and stock, or $38.31/share based on Expedia's Tuesday close.
- Expedia will pay $10.15/share in cash and issue 0.2065 shares for each HomeAway share. The deal is expected to close in Q1 2016.
- AWAY is halted. EXPE is up fractionally after hours.
Sep. 17, 2015, 10:33 AM
- With the DOJ having given its blessing to the deal yesterday afternoon, Expedia (EXPE +2.9%) has closed its $1.6B ($12/share) acquisition of Orbitz (OWW). The latter's shares have been delisted, while the former's are rallying for the second day in a row.
- Expedia and Orbitz both jumped shortly before the close yesterday after Bloomberg reported U.S. regulators were set to approve the tie-up. The DOJ confirmed the report after the close, declaring it has "concluded that the acquisition is unlikely to harm competition and consumers."
Sep. 16, 2015, 3:59 PM
- Bloomberg reports U.S. regulators are set to approve Expedia's (EXPE +5.1%) $1.6B purchase of smaller rival Orbitz (OWW +6.4%). Shares of both companies have shot higher in response.
- The DOJ has been closely vetting the deal, which has sparked complaints among travel industry firms about the post-merger company's dominant U.S. online travel share and potential pricing/bargaining power.
- Update (4:26PM ET): The DOJ has released a statement confirming it won't challenge the Expedia/Orbitz deal. "The Antitrust Division investigated the concerns that have been expressed about this transaction. We took those concerns seriously and factored into our analysis all of the information provided by third parties. At the end of this process, however, we concluded that the acquisition is unlikely to harm competition and consumers."
Jul. 30, 2015, 2:44 PM
- The NY Post reports the DOJ is expected to sign off on Expedia's (EXPE +0.8%) $1.6B acquisition of Orbitz (NYSE:OWW). Official approval could reportedly arrive by the end of August.
- The DOJ has been closely vetting the deal on account of Expedia/Orbitz's combined U.S. online travel share. Even after today's gain, Orbitz trades 5.5% below Expedia's $12/share buyout price.
- Expedia reports after the close. Orbitz reports on Aug. 6.
May 22, 2015, 8:29 AM
- Expedia (NASDAQ:EXPE) announces it sold a 62.4% stake in eLong (NASDAQ:LONG) for $671M.
- The eLong business has been an ongoing drag on profits for Expedia.
- One of the buyers in the group is Ctrip.com (NASDAQ:CTRP).
- As part of the sale agreement, Expedia and Ctrip.com agreed to cooperate in certain geographic markets.
- LONG +36.4% premarket to $28.17.
Mar. 10, 2015, 9:16 AM
- Expedia (NASDAQ:EXPE) says it will partner more closely with Latin American online travel sites Decolar.com and Despegar.com under the terms of a new deal with Decolar.
- The arrangement will see Expedia and Decolar share more hotel supply with each other.
- Expedia has also made a $270M equity investment in Decolar.
Feb. 12, 2015, 8:33 AM| Feb. 12, 2015, 8:33 AM | 2 Comments
Jan. 23, 2015, 9:27 AM
Jan. 16, 2015, 4:08 PM
- Oppenheimer observes the FTC has disclosed it granted Expedia (EXPE +1.2%) and Sabre (SABR +1.5%) an early termination notice regarding an antitrust review filing, with the acquired entity in the transaction being Travelocity.
- With no announcement yet from either company, Oppenheimer states it "can only opine on the probability that Expedia is in the process of acquiring the entire Travelocity asset" from Sabre.
- Expedia struck a deal with Sabre in 2013 to power Travelocity's tech platforms and provide its travel inventory, in exchange for a 50% revenue share; that deal provided a big lift to 2014 bookings. Oppenheimer argues a full acquisition of the travel platform would be a win-win: It would boost Expedia's U.S. share and top line, and would allow Sabre to shed a non-core asset and further de-lever its balance sheet.
- Expedia's Q4 report is due on Feb. 5.
Nov. 4, 2014, 7:33 AM
- Expedia's (NASDAQ:EXPE) takeover of Wotif.com (OTCPK:WTIFY) received another green light, this time from New Zealand's competition regulator, leaving just one more regulatory hurdle for the A$699M ($610M) deal.
- "All of the conditions precedent to the scheme of arrangement, save for approval by the Supreme Court of Queensland, have now been satisfied," Wotif.com said in a statement. "A final hearing will be held at the Queensland Supreme Court tomorrow morning."
- The deal will make it easier for U.S.-based Expedia to grow in Australia and the Asia-Pacific.
- Previously: Australia approves Expedia's Wotif.com takeover
Oct. 2, 2014, 1:46 AM
- Despite raising concerns last month regarding Expedia's (NASDAQ:EXPE) takeover of Wotif.com (OTCPK:WTIFY), Australia's Competition and Consumer Commission has cleared the $660M deal.
- The antitrust regulator says that the acquisition is unlikely to diminish the dynamic nature of the online accommodation distribution market.
- Previously: Expedia, Wotif deal raises concerns down under
Sep. 24, 2014, 1:20 PM| Sep. 24, 2014, 1:20 PM
Sep. 4, 2014, 4:34 AM
- Expedia's (NASDAQ:EXPE) international expansion effort has hit a bump in Australia, after the country's Competition and Consumer Commission announced concerns over its $660M takeover of Wotif.com (OTCPK:WTIFY).
- In its preliminary assessment of the deal, the antitrust regulator says that Expedia's bid could inflate commission rates charged to accommodation providers. The regulator's final decision is due in October.
Jul. 7, 2014, 1:41 AM
- Expedia (EXPE) has agreed to buy Wotif.com, an Australian online travel group, for $660M. Expedia is expecting the deal to expand its customer base in the Asia-Pacfic region.
- Wotif's directors and co-founder plan to vote in favor of the deal, to put the company back on its feet after facing declining hotel bookings and profits.
Expedia, Inc. is an online travel company. The company provides travel products and services to leisure and corporate travelers, including travel agencies, tour operators, travel supplier direct websites and call centers, consolidators and wholesalers of travel products and services, large... More
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