Activist investor Starboard Value has built a stake of more than 9% in Tripadvisor (TRIP), as shares of the online travel company continue to lose value. Following the news, TRIP stock jumped over 6% in after-hours trading. The news was first reported by the Wall Street Journal, citing people familiar with the matter.
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Starboard Value, led by billionaire hedge fund manager Jeff Smith, has acquired a stake of roughly $160 million in Tripadvisor, making Starboard one of the largest shareholders. Tripadvisor operates an online travel booking platform, as well as Viator, an experiences review and booking site, and TheFork, a restaurant reservation platform.
Tripadvisor Has Rejected Several Takeover Bids
TRIP stock lost more than 17% over the past year before Starboard’s stake was announced, mainly due to underperformance in the company’s namesake booking platform. In early 2024, Tripadvisor announced it had formed a special committee to consider strategic alternatives, including a sale. However, the company’s board did not approve any deals, despite receiving some highly lucrative offers.
Now, Starboard has entered the picture and is expected to ensure that all company decisions are made in the best interests of shareholders and with the goal of maximizing their returns. Starboard is known for taking strategic stakes in underperforming companies and driving meaningful turnarounds. Starboard’s exact intent for acquiring a stake in Tripadvisor remains unknown at this time.
The activist investor is expected to disclose the exact details of its stake in a regulatory filing today. Meanwhile, Starboard also holds positions in Qorvo (QRVO), Pfizer (PFE), and Riot Platforms (RIOT).
Here’s What Tripadvisor’s KPIs Reveal
According to data compiled by Main Street Data, Tripadvisor’s Viator segment shows robust growth, backed by an increase in booked experiences and rising revenue, reflecting strong demand for travel experiences. TheFork has also witnessed a notable boost in revenue, indicating successful market penetration in Europe. However, the Brand Tripadvisor segment faces challenges due to declining revenue, highlighting competitive pressures in the travel sector.
Is Tripadvisor a Good Stock to Buy?
Analysts are becoming increasingly bearish about Tripadvisor’s long-term stock trajectory due to ongoing challenges. On TipRanks, TRIP stock has a Moderate Sell consensus rating based on one Buy, five Holds, and four Sell ratings. Also, the average Tripadvisor price target of $14.70 implies 1.9% downside potential from current levels.
