Option update 1-28-08: InterActiveCorp volatility up

IAC/InterActiveCorp (NASDAQ: IACI) and Liberty Media (NASDAQ: LINTA) have sued each other over IACI's planned breakup into five separate businesses.

IACI is recently up 20 cents to $24.60; shares near three-year low into company break up.

IACI is expected to report EPS on February 6.

IACI announced the plan to separate IACI into five publicly traded companies on November 5, 2007:

1. HSN, will include business comprising IACI's retailing segment.
   
2. Ticketmaster.
   
3. Interval International, which will include CondoDirect, Resort Quest Hawaii and VacationSource.
   
4. LendingTree, which will include RealEstate.com Domania, GetSmart, Home Loan Center and iNest, and
   
5. IAC media & advertising, Ask.com, Bloglines, City Search, Cursor Mania, Evite, Excite, insiderpages, iWon, My Fun cards, Black Web Enterprises Shoebuy.com, Match.com.
   

IACI February option implied volatility of 47 is above its 26-week average of 33 according to Track Data, suggesting larger risk.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com