Thursday, April 7, 2011

Expedia Stock Jumps 14% After Announcing It Will Spin Off TripAdvisor (EXPE)

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Expedia seems to want to unlock shareholder value by splitting into two companies, and it's apparently working already.

Shares are up 14% in after-hours trading after Expedia announced plans to spin TripAdvisor off as a separate, publicly held company.

Expedia is a web-based travel agent, with brands including Expedia, Hotels.com, Hotwire, etc., while TripAdvisor is an advertising-driven media company. Expedia paid $237 million for the company in 2004, Tricia Duryee reminds us.

The spinoff is actually kind of a contrarian move for the times. Expedia is splitting up media and e-commerce while everyone else is trying to merge them. But so far, investors seem to like it.

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