Expedia gets a lifeline

Article Excerpt

EXPEDIA GROUP INC. $88 is a buy. The company (Nasdaq symbol EXPE; Consumer sector; Shares outstanding: 141.0 million; Market cap: $12.4 billion; Dividend suspended in 2020; Takeover Target Rating: Medium; www.expediagroup.com) operates the world’s largest online travel platform. Its brands include Expedia, Egencia, HomeAway, Orbitz, Travelocity, Classic Vacations, Hotwire.com, Hotels.com, and CheapTickets. COVID-19 has walloped travel-related businesses. To bolster Expedia’s operations, private-equity firms Silver Lake LLC and Apollo Global Management (New York symbol APO) invested a total of $1.2 billion in the company. The two received preferred shares that yield 9.5%. They also got warrants to buy 4.2 million shares of Expedia common stock at $72 a share. The warrants are good for 10 years. The cash should help tide Expedia over until COVID-19 restrictions are lifted and travel volumes improve. Things have already started to improve: room bookings were down just 45% in June from a year earlier compared to the 85% drop in the second half of March and in April. Expedia Group is a..

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