4. InterActiveCorp (NASDAQ:IAC)
Number of Hedge Fund Holders: 45
InterActiveCorp (NASDAQ:IAC) is a media and internet company operating worldwide. It published original and engaging digital content in the form of articles, illustrations, videos, and more.
Brian Fitzgerald at Wells Fargo reiterated an Overweight rating on InterActiveCorp (NASDAQ:IAC) on November 14.
As of this October, InterActiveCorp (NASDAQ:IAC) had $1.79 billion in cash assets, and almost $2 billion in MGM stock. This covers the company’s debt load twice over. Its free cash flow annualizes at $148 million. The company is expected to benefit from steady growth and no pressure from its debt since the majority of the debt matures in 2028.
Out of 920 hedge funds tracked in the third quarter, 45 funds were long InterActiveCorp (NASDAQ:IAC). Their total stake value was $1.1 billion.
Alphyn Capital Management, an investment management firm, mentioned InterActiveCorp (NASDAQ:IAC) in its third-quarter 2022 investor letter. Here’s what the firm said:
“Angi, IAC Inc. (NASDAQ:IAC)’s home services business, has had an especially tough time. The company has not cracked the code on its fixed-price service and still has difficulty matching consumer demand to service professionals. Pricing missteps with its recently acquired roofing business have not helped matters. We also recently learned that Oisin Hanrahan is stepping down as CEO to be replaced by Joey Levin, IAC’s CEO. It is unclear how Mr. Levin plans to salvage the situation, for example, by giving his full personal attention to a turnaround or by preparing the company for a sale (I am speculating). It will be an important test of Mr. Levin’s pragmatic leadership and operating skills.
IAC has had better results with its investment in MGM, whose shares have doubled since IAC first invested. With its brand and substantial casino operations, MGM is well-placed to compete in the rapidly growing online betting market. IAC believes they have the talent to help with this and consequently bought more shares.
DotDash’s acquisition of Meredith’s print business has been mixed so far. On the one hand, DotDash, as promised, has successfully transferred most of Meredith’s content online and improved advertising performance through better targeting, website speed, and customer experience. On the other hand, the turn in the macro environment impacted ad spending, and the combined company will not meet its initial $450m EBITDA target. I expect that macro factors, though unpleasant, will be temporary.
At the current share price, MGM, DotDash, and approximately $1bn in cash make up IAC’s entire value, while Angi and IAC’s portfolio of earlier-stage companies all provide upside optionality.”
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