If Starboard succeeds, Is Expedia the most logical buyer for Viator? And how much upside is actually on the table for TRIP shareholders?

I've been following TripAdvisor for some time now and posting my thoughts, and there are more and more arguments about preparing to sell a key part of the business, and perhaps the entire company. At the center of it all is Viator, and the question that arises for me now is who will ultimately buy what is most valuable in the company and at what price.

What makes the whole story interesting is the work of the activist fund Starboard Value. Their modus operandi is to enter a company that has hidden value, simplify the structure, put pressure on the board and eventually cash in on that value through a sale or spin-off. TripAdvisor is almost a perfect example of such a situation because it has a complex structure, has several different business lines and, most importantly, the market does not value parts of the company the way an activist sees it. Starboard has already initiated changes in management, so we will hear some indications of concrete moves and deadlines from it at the shareholders' meeting in June.

If we simplify things, it becomes clear that the real value here is not Tripadvisor’s hotel core business with reviews and advertising, but Viator, a fast-growing platform for booking experiences, tours and activities with high margins. This segment already generates about half of the company’s revenue, is growing at double-digit rates, and has the characteristics that investors are looking for today, high margins and a fragmented market that allows for further expansion. When you compare this to the current market capitalization of the entire company, you come to the rather absurd conclusion that the market values ​​the rest of the company, including the fast-growing TheFork, at close to zero, or even negative.

Therefore, the question of a potential buyer for Viator becomes crucial. And this is where Expedia emerges as perhaps the most logical candidate. They don’t need all of TripAdvisor, they need exactly what Viator represents. Expedia already dominates the flights and hotels segments, but the experiences segment is still small. By buying Viator, they would not only speed up their entry into that space, but practically overnight they would become a global leader, without the need for years of development, fighting with competition and contracting offer partners.

Thesis gains weight when you look at the composition of the TRIP Board after Starboard's entry as several new members have direct operational experience from Expedia, which means they not only understand the value of such a business venture, but also the potential synergies from within. Such connection is often not accidental in such situations and may indicate that Expedia is one of the natural and already known potential customers.

If one tries to put a specific number on Viator, it comes to a range of roughly $2 billion to $3 billion, depending on multiples and growth expectations. What if, for example, Booking appeared with a counter offer? When you factor in the potential synergies for a buyer like Expedia, it's not unrealistic to imagine they'd be willing to pay even more, perhaps as much as $4 billion. What makes the whole situation particularly interesting is the fact that the entire TripAdvisor is worth a multiple of that today. This opens up the possibility of a classic sum of the parts scenario in which a buyer could take over the entire company, separate Viator as a key asset, and restructure or sell the rest.

For TripAdvisor shareholders, the outcome would be pretty clear. If only Viator were to be sold, there is a real chance for a massive and rapid re-evaluation of the stock, potentially up to 100%, depending on the structure of the transaction.

All of this together gives the impression that we are in the early stages of an event-driven process. Starboard has already laid the foundations, management is under pressure, the value is clearly undervalued, and a strategic buyer is logical. What is missing is a concrete move, which is to initiate a formal sale or spin-off process. The market is reacting mildly, TRIP is rising slightly while the market is falling, but if clearer news about this crystallizes, growth will be explosive.

In the end, perhaps the most important thing is how to view this investment in general. It is clear that this is not a classic long-term growth story. This is a situation where value can be unlocked through one or several key events. And so the real question is not whether TripAdvisor will recover as a business, but who will eventually end up as the owner of Viator, and how much they will be willing to pay for that position. What are your thoughts on this?