Is Expedia packing up and getting ready to fly private? |
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Is Expedia packing up and getting ready to fly private?
Citing unnamed sources from within the "financial bowels of New York," VentureBeat reports that Bellevue-based Expedia is considering going private. Meanwhile, The Wall Street Journal notes a spark in options trading that may be tied to the move.
If true (and at this point we have heard nothing along these lines) it would be just the latest chapter in the twists and turns of Expedia, which has had more corporate parents than we can count. Incubated at Microsoft in 1995, Expedia spun out as a publicly-traded company in 1999 before being gobbled up by Barry Diller's IAC/InterActive Corp. in 2003. IAC and Expedia then split into two separate publicly-traded companies in 2005.
So, based on the fact that its ownership structure appears to change every four years, the timing sounds about right.
The stock trades on the Nasdaq under the ticker EXPE, with a market value of $2.6 billion. Over the past year, the stock has lost two thirds of its value, another reason a deal might be in the works.
Interestingly, VentureBeat suggests that Expedia may want to go private so it can upgrade its service to compete with the likes of upstarts like Seattle-based Farecast, which was acquired by Microsoft for $115 million last year.
Expedia reported revenue of $833 million for the quarter ended September 30, with net income of $95 million. That compared to revenue of $759 million for the same period last year. It had $659 million in cash on the books at the end of the last quarter.
Still, with the travel market in a slump, it might be a good time for Expedia to wait on the sidelines as a private player.
Here's what Expedia Chairman Barry Diller had to say at the time of the last financial report:
"Yes, it's a difficult environment, but that's everyone's news, and for travel any predictions about its depth or duration would be foolish. What is important for shareholders of Expedia to know is that the Company is well capitalized, focused only on operating its sole travel services business, with no distractions, and a conviction that it will emerge stronger in every line of its business.”
UPDATED: A company spokeswoman had this to say about the report: "As a matter of corporate policy we don't comment on rumors or speculation."
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