Tripadvisor Stock Plunges After Possible Buyout Deal Is Scrapped

A decision not to pursue a merger sent shares of Tripadvisor (TRIP) plunging nearly 29% Wednesday.

Special Committee Rules Out Sale

The online travel site reported that a special committee formed to consider a deal determined that for now “there is no transaction with a third party that is in the best interests of the Company and its stockholders.” The company added that the committee would “continue to evaluate proposed alternatives as appropriate.”

The group was put together in February after Tripadvisor said that Liberty TripAdvisor Holdings (LTRP), the controlling shareholder, would be considering various options involving LTRP and the company. LTRP was reportedly approached by at least one bidder to acquire Tripadvisor.

Narrowing Losses

Along with the abandoned prospective deal news, the company announced it posted a first-quarter loss of $59 million, or 43 cents per share, narrowing from a loss of $73 million or 52 cents per share in the year-ago period. That result included the net impact of $42 million in incremental income tax expense tied to a previously reported Internal Revenue Service (IRS) audit settlement. Adjusted net income was $17 million, with adjusted earnings per share (EPS) coming in at 12 cents, better than expected. Revenue rose 6% year-over-year to $395 million, in line with estimates.

Tripadvisor Brand Sales Decline

Sales at the company’s Tripadvisor brand dropped 2% to $240 million. They were up 23% to $141 million at tour provider Viator, and 17% higher at $41 million for restaurant booking site TheFork. Total costs and expenses for the company rose 6% to $410 million.

Shares of Tripadvisor fell nearly 29% to $18.16 Wednesday, their lowest level this year.