Expedia, Inc. (NASDAQ: EXPE) is recently up $1.77 to $23.51. Shares are higher on rumors that Barry Diller wants to take EXPE private.
EXPE has a market cap of $6.3 billion with long term debt of $740 million and cash of $697 million. EXPE reported 2007 annual revenues of $2.6 billion. EXPE call option volume of 12,488 contracts compares to put volume of 1,045 contracts. EXPE June option implied volatility of 45 is above its 26-week average of 37 according to Track Data, suggesting larger risk.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
According to the New York Post, IAC/InterActiveCorp. (NASDAQ: IACI) Chairman Barry Diller is expected to meet with his board this week to restart the process of breaking up his company into five separate pieces, sources said. At the same time, Diller and Liberty Media Corporation (NASDAQ: LMDIA) Chairman John Malone are continuing to talk about a deal that would trade one or more of IAC's assets for Liberty's ownership stake in IAC.
The UK Times has learned that Numis Securities, the stockbroking group headed by Michael Spencer, is in "advanced talks" to buy the UK equities business of The Bear Stearns Companies Inc (NYSE: BSC). Numis may look to hire a team of 25 from Bear.
Barry Diller has won his dispute with John Malone. Malone's Liberty Media (NASDAQ: LCAPA) owns a a large piece of the company that Diller runs, IAC/Interactive (NASDAQ: IACI). Diller has the right to vote those shares under a long-standing agreement.
Diller has decided to break IACI into five companies because the businesses in the firm do not have significant relationships to one another. Malone wanted to block the break-up and filed suit in court.
According toMarketWatch, "Vice Chancellor Stephen Lamb ruled Friday that "Liberty has failed to demonstrate that Diller has breached or threatened to breach any contractual duty he owes to Liberty," according to Lamb's 78-page opinion."
Diller can now complete his plans.
That leaves open the question of whether IACI is worth more in pieces than it is as a conglomerate. The firm's stock trades at $20, near its 52-week low and down from the period high of over $39. Some of the company's divisions, especially Lending Tree and HSN had tough years in 2007. These would get very low valuations as independent operations and might not make up for the value of more attractive operations like Ask.com
Diller may have gotten his way, but it is not clear that it will help shareholders.
Douglas A. McIntyre is an editor at 247wallst.com.
Will InterActive Corp. (NASDAQ: IACI) be dumping its search and information portal Ask.com? Sort of, according some insider accounts. It wouldn't be jettisoning Ask.com entirely -- it would just be getting rid of the technology that powers the search engine's results. The engine behind Ask.com, Teoma, could be taken out and replaced by Google, Inc. (NASDAQ: GOOG)'s technology.
Google already has a stranglehold on internet search. It's been suggested for quite a while that Yahoo, Inc. (NASDAQ: YHOO) dump its pride in its search engine technology (known as Project Panama for the last few years) and just use Google instead for powering its search engine. Does Google have that much power -- one that would make competitors use its search engine technology to power their own sites? Yes, it does.
If Ask.com were to switch to just using Google, then the search service really would hold little value to the customers using it. Sure, Ask.com would wrap Google search results in its own brand and customer interface, but would there truly be a compelling reason to use Ask.com at that point? Not really. Just like Yahoo!, Ask.com has spent huge amounts of cash to improve its search technology with little to show for it.
That's the first-mover advantage Google has. Even if either had a better search service, that wouldn't mean more search customers. Then again, does either have a superior search service? I personally use Ask.com daily in addition to Google -- it's great. For my sole search engine service, though, it's not that good.
IAC/InterActive Corp. (NASDAQ: IACI) Chief Executive Barry Diller is one CEO who cannot be tamed by his corporate public relations staff or lawyers. He says what he wants when he wants, seeming not to care much for the potential ramifications.
Take his fight with fellow tycoon John Malone of Liberty Media Holding Corp. (NASDAQ: LINTA) over Diller's plan to split up his conglomerate that's been cobbled together through dozens of acquisitions of seemingly disparate companies. Liberty also happens to own majority stake in IAC. However, a long-standing agreement with Diller allows the mogul to control it through a proxy agreement. Well, at least that was the case until recently.
Liberty has asked a Delaware Chancery Court to remove Diller from IAC's board [subscription required] along with other members, and to have several of Liberty's nominees put in their place. The company also asked for Diller to be removed from BDTV, which the Wall Street Journal described as "a little-known entity through which Liberty owns most of its stake in IAC."
With regulators, politicians and rating firms biting at their heels, Countrywide Financial Corporation (NYSE: CFC) believed that it had no choice but to approach Bank of America Corporation (NYSE: BAC) last month about a merger, reported the Wall Street Journal. That fear led to BAC's $4B takeover of Countrywide, the Wall Street Journal reported.
According to the Financial Times, European public health specialists have found "significant resistance" to Roche Holding Ltd's (OTC: RHHBY) widely purchased influenza antiviral medicine Tamiflu.
OTHER PAPERS:
Shares of Britain's third-largest drug maker, Shire Plc (NASDAQ: SHPGY) plummeted yesterday to a two-year low on concerns about demand for its attention deficit hyperactivity disorder treatment for children, Vyvanse, the Telegraph reported.
The Wall Street Journal reported that IAC/InterActiveCorp's (NASDAQ: IACI) CEO Barry Diller is in talks with outside investors or possible buyers for all four companies that he plans to spin off, according to a person familiar with the situation.
According to a source close to Yahoo! Inc (NASDAQ: YHOO), CEO Jerry Yang has decided to go forward with layoffs at the company. The source said that the layoffs will come in the 1,500-2,000 range instead of the "hundreds" reported elsewhere, the Silicon Alley Insider reported.
Liberty Media Corporation (NASDAQ: LCAPA) filed a lawsuit in Delaware against IAC/InterActiveCorp's (NASDAQ: IACI) Barry Diller in an attempt to block Mr. Diller from completing the spinoffs of several units on terms that could dilute Liberty's voting power; the suit follows a suit filed by IAC against Liberty seeking to complete the divestiture on its own terms, the Wall Street Journal said.
OTHER PAPERS:
The Evening Standard learned that billionaire Wilbur Ross is in takeover talks with AMBAC Financial Group Inc (NYSE: ABK) and that a deal could come within the next two weeks.
WEB SITES:
According to analysts, TheDeal.com's Dealscape blog reported that the troubles at WellCare Health Plans Inc (NYSE: WCG) could lead to a sale of the company after the departure of the company's three executives.
Citing a source close to Advanced Micro Devices Inc (NYSE: AMD), CRN.com reported that rumors of a merger between the company and International Business Machines Corporation (NYSE: IBM) "is nothing but speculation." A rumor in Mergermarket, which caused AMD's share price to spike almost 11% on Wednesday, said IBM's microelectronics division could merge with AMD "possibly in the near term."
How did Wall Street's darlings become dogs? People are scared about everything from subprime mortgages to the horrible real estate market, so they may be selling their tech stocks and burying the money in shoe boxes in their back yard. Maybe there was some profit taking. I'll entertain all theories, but the issue for investors today is whether Wall Street has thrown the baby out with the bath water. In some cases, the answer is yes. Below is a run-down of the major tech companies set to report over the next two weeks.
Good News: People continue to love their iPhones and iPods. iTunes leads the way in digital media. Even the Mac is gaining sales thanks in part to the clever ad campaign. Overseas sales should be strong.
Bad News: Steve Jobs & Co. may be vulnerable to a slowdown in the economy. Gadget freaks may not be able to afford the latest gizmos if they are worried about paying their mortgages. Like Google investors, Apple shareholders will bolt at the first sign of trouble.
InterActive Corp. (NASDAQ: IACI) is turning the executive offices upside down in a management shakeup, which will see Ask.com CEO Jim Lanzone leave the company. Lanzone will land at Redpoint Ventures as an entrepreneur-in-residence while he continues serving Ask.com in an advisory role for at least a few more months.
InterActive is preparing to shed itself of several key properties, including the Home Shopping Network (HSN), Ticketmaster, Interval International and Lending Tree. InterActive CEO and industry heavyweight Barry Diller said"These changes are intended to strengthen and streamline the operating structure at IAC, both leading up to our intended spin-offs, and beyond."
Although Diller praised Lanzone for turning around Ask.com in his two-year tenure there, nothing has really changed with the search engine's market share in that time besides some small market share gains. I use Ask.com daily and find it to be a highly reliable and engaging experience. The problem is Google, Inc.'s (NASDAQ: GOOG) huge first-mover advantage in the internet search and advertising space. Ask.com has said it is fine with the industry placement it has, but growth doesn't come by standing still. Yes, Ask.com still holds a decent fourth-place rating in the internet search industry -- but is that enough moving forward? Doubtful -- unless it can monetize its customers nicely and see growth in that arena.
Barry Diller digs AOL. The media mogul spoke of his devotion to our corporate owners last week at a conference sponsored by Advertising Age when he was asked if he would ever buy the business if Time Warner Inc. (NYSE: TWX) ever was interested in selling.
"We've talked over the years about our interest in AOL and never been able to get Time Warner to engage with us." Diller is quoted as saying (via DealBook). "I've always said AOL is great opportunity for somebody. When and if Warner doesn't want it, I'll certainly be at the door."
A couple things to keep in mind. First, Diller's talk may just be that since Time Warner hasn't actually said it wants to sell AOL. Second, he's got his hands full already with his plans to split up IAC/InterActiveCorp (NASDAQ: IACI). Third, Diller would have to fight the likes of Google Inc. (NASDAQ: GOOG) and Yahoo Inc. (NASDAQ: YHOO) if AOL were ever put up for sale.
Still, it's nice to know that AOL, which has long been the bane of Time Warner's shareholders, has at least one high-powered fan.
InterActive Corp. (NYSE: IACI) seems to be following the herd with this week's announcement of a comedy news channel that sounds very similar to Comedy Central's The Daily Show and The Colbert Report. The new IAC property, titled 23/6, will partner with liberal political site the Huffington Post and will be in full comedic charge of satirizing the news with humor interlaced throughout all moments.
Bloggers from the Huffington Post as well as comedy writers from The Daily Show and The Simpsons will be part of the cast, so expect some funny moments from the new network. 23/6 joins a growing roster of online and television networks and series dedicated to taking normal (and highly predictable) news and turning a spin on those stories to keep the bay of reality, well, away from the mind of the normal consumer. At least, that's my two cents here.
I especially like 23/6's planned "Monolog-o-tron," which will be an online tool for generating your own talk show using drop-down menus on a website. That's a shot at Letterman and Leno and my guess is that it won't be the last one taken. With a whole new generation taking to the web for news and satire instead of played late-night shows, this could very well be another great hit for Barry Diller's IAC.
Internet tycoon Barry Diller, who is splitting up his IAC/InteractiveCorp (NASDAQ: IACI) conglomerate, has been adding to his position in Expedia Inc. (NASDAQ: EXPE), the Internet travel site where he's also chairman.
According to Reuters, Diller exercised options to buy 9.5 million shares at $8.59, giving him a 27.7% stake in the company. Judging from the company's recent performance, he may be onto something.
Net income soared 69% to $99.6 million, or 32 cents per share, compared with $59 million, or 34 cents a year earlier, the Bellevue, Washington-based company said today. Revenue rose 24% to $759.6 million. When one-time items are excluded, Expedia said its earnings were 39 cents, beating the 37 cents expected by analysts surveyed by Reuters.
"Expedia succeeded on almost every financial metric during the third quarter," crowed an ecstatic Diller in the earnings release. "These are good results, and our ability to keep them coming depends on the right balance of investment and profitable growth -- and I think we've shown our ability to be in proper cadence with those levers throughout this year."
Though the results were impressive, I am still have my doubts about the online travel business because it's so price competitive. But investors clearly aren't as pessimistic as I am since Expedia shares are up more than 43% this year.
Ever since Barry Diller cobbled together the internet Frankenstein called IAC/InterActiveCorp. (NASDAQ: IACI), he had been assuring investors that somehow it all made sense to group together TicketMaster with Evite with Ask.com. Wall Street cried confusion.
Then the media mogul spun off his Expedia travel business into a separate company, figuring that was the reason why investors were confused by the ungainly IAC. Judging from the stock price, investors were just as confused as ever, even as IAC said it was "proud to have so many great brands under one roof." Now, Diller has thrown in the towel and is splitting up IAC into five separate publicly traded companies. As envisioned, IAC would be more or less a media and entertainment company, maintaining businesses including Ask.com, Citysearch, Evite, CollegeHumor and Bloglines. The other companies would be centered around HSN, TicketMaster, and Interval International.
Diller seems to have gotten the message from Wall Street, albeit about five years too late.
"We've been a complex enterprise almost from the very beginning 12 years ago, with hundreds of transactions over those years," he said. "And while we've created a lot of value, I've always believed our complexity and many mouthfuls of sentences to explain who we are and what our strategy is have hampered clarity and understanding with all our constituencies, particularly investors."
InterActiveCorp (NASDAQ: IACI) announced the plan to separate IACI into five publicly traded companies:
HSN, will include business comprising IACI's retailing segment.
Ticketmaster.
Interval International, which will include CondoDirect, Resort Quest Hawaii and VacationSource.
LendingTree, which will include RealEstate.com Domania, GetSmart, Home Loan Center and iNest, and
IAC media & advertising, Ask.com, Bloglines, City Search, Cursor Mania, Evite, Excite, insiderpages, iWon, My Fun cards, Black Web Enterprises Shoebuy.com, Match.com.
Barry Diller, Chairman and CEO says, "It makes nothing but sense to me to reorganize the whole."
IACI over all option implied volatility of 33 is above its 26-week average of 27 according to Track Data, suggesting larger risk.
Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
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