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$23.84 0.13 (0.55%)
5/16/2008 4:00 PM

IAC/InterActiveCorp (IACI)

CAPS Rating:
***

The Company operates and diversified businesses in sectors being transformed by the Internet, online and offline its mission is to harness the power of interactivity to make daily life easier and more productive for people all over the world.

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Avatar aj350 (< 20) Submitted: 11/13/07 4:50 PM : Outperform Start Price: $29.70 IACI Score: -15.33

The real jewels here are the search and web properties.

Stand alone web-related companies trade at about 15x EBITDA, therefore I'll estimate what's expected to remain of IACI (ask.com, match.com, citysearch, etc) at $3 billion

HSN will prob go for about $2.5bil or 10x EBITDA, and may go for a premium if Liberty wants to buy it out, perhaps upwards of 12-13x EBITDA (vast synergies with their shopping network)

Ticketmaster is another slab. It should go for about $2.5 billion as well, given its monopoly over ticket sales that looks generous.

These segmentss alone add up to $8.5 billion, Interval should another another $1.5 billion, and walla! you have a company that should be worth about $10 billion instead of its EV of $8billion (assuming dilution), don't forget to subtract out a present value of corporate expenses (assume $500 mil for that portion).

that's good for about a 20-30% return, of course I'd probably sell most of everything but IACI (I'd like to keep the web properties since they have high operating leverage!)

Money in the BANK!

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