TripAdvisor Stock Pops On Buzz That Starboard’s Building a Stake — And Activist Is Now A Top Shareholder

Tripadvisor, Inc. (TRIP) shares rallied over 6% in Wednesday’s extended trading as traders reacted to a report regarding activist investor Starboard’s interest in the online travel company.

The Wall Street Journal, citing people familiar with the matter, reported that Starboard, run by fund manager Jeff Smith, now held an over 9% stake in the Needham, Massachusetts-based company. The stake will likely be disclosed on Thursday.

At Wednesday’s closing price of $14.99 for Tripadvisor stock, Starboard’s stake is valued at about $160 million.

Starboard will now be one of the top shareholders of Tripadvisor. According to Yahoo Finance data, only BlackRock ($194.5 million) and Vanguard Group ($178.1 million) have higher stakes than Starboard.

The activist’s increased interest comes after the company announced a $435 million deal to buy out its majority owner, Liberty TripAdvisor, in December. In January, the company announced that it received a non-binding indication of interest from a strategic bidder for both the company and its parent in October.

The offer price being discussed was $18-$19 per TripAdvisor share not held by its parent.

On Stocktwits, retail sentiment toward Tripadvisor stock was ‘bullish’ (59/100) by late Tuesday, and the message volume was high.

Commenting ahead of the report, a user said the entire company is Viator, its tour company. “Could be a good buy on trade resolution... same with some of the airlines,” they said.

TripAdvisor stock has underperformed the broader market, up only 1.5% compared to the 5.9% gain for the S&P 500 Index, as the company’s namesake website sees slowing growth. The company is currently valued at $1.77 billion.

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