Tripadvisor, a popular travel platform, is facing struggles that have been exacerbated by its relationship with Liberty Tripadvisor, its major shareholder. Liberty Tripadvisor’s CEO, Greg Maffei, has confirmed ongoing discussions with Tripadvisor regarding potential strategic alternatives. This includes a special committee that was formed in February to explore options such as a sale. However, Tripadvisor has stopped discussions with third parties and is focused on rationalizing its capital structure.
Liberty Tripadvisor holds a majority of Tripadvisor’s voting power through its ownership of Tripadvisor Class B shares, which has had a negative impact on Tripadvisor’s share price. Despite reaching a high of $28.56 in the past year, Tripadvisor’s shares are currently trading at around $16. Additionally, Liberty Tripadvisor’s common stock and Series B shares were delisted from Nasdaq in October 2023. One major issue being discussed is the $325 million owed by Liberty Tripadvisor to Certares in the form of preferred stock, with an 8% dividend that needs to be repaid by March 2025.
The future of Liberty Tripadvisor as a going concern is uncertain, as stated in its financial filing on Wednesday. With management’s plans not alleviating the substantial doubt surrounding the entity’s ability to continue as a going concern, discussions with Tripadvisor are crucial in determining the next steps for both companies. Tripadvisor’s struggles have been well-documented, and its relationship with Liberty Tripadvisor has added to its challenges. While considering strategic alternatives, Tripadvisor is primarily focused on discussions with its controlling shareholder rather than third-party suitors.
The impact of Liberty Tripadvisor’s financial status and ownership on Tripadvisor’s share price has been significant, with Tripadvisor’s shares trading at a notable decrease from their previous high. The ongoing discussions between Tripadvisor and Liberty Tripadvisor are essential for reaching a resolution regarding the capital structure and future direction of both companies. With the possibility of a sale or other options on the table, Tripadvisor’s special committee is dedicated to finding a solution that will benefit the company moving forward.
As Liberty Tripadvisor’s financial difficulties persist and its future as a going concern remains uncertain, the company’s relationship with Tripadvisor is under scrutiny. The debt owed to Certares and the overall impact on Tripadvisor’s share price are key factors in these discussions. With Liberty Tripadvisor’s delisting from Nasdaq and Tripadvisor’s struggles in the market, finding a resolution that addresses the financial challenges of both companies is essential. The ongoing talks between Tripadvisor and Liberty Tripadvisor will play a crucial role in determining the next steps for both entities in the travel industry.
