Starboard Takes 9% Stake in Tripadvisor, Eyes Turnaround

Starboard Value acquired a 9% stake in Tripadvisor to push for strategic changes because the company appears undervalued to the activist investor. The stock price of Tripadvisor rose by 17% during the first part of Thursday trading after the news.

The U.S. regulatory filing from Starboard revealed their $160 million investment because they see the company as a “compelling value opportunity.” The fund intends to start discussions with Tripadvisor’s management team to discover methods that will increase shareholder value.

The company has experienced slower growth than its industry peers throughout the previous years. The stock price of Tripadvisor has increased 1.5% during the current year but the U.S. Travel and Leisure Index has risen 10.5%. The company operates at a forward earnings multiple of 7.9 which is less than half of the industry median according to LSEG data.

The company completed its acquisition of Liberty Tripadvisor Holdings during the last part of 2024 to become an independent entity. The company faces difficulties in converting its extensive user base into revenue while it struggles to adjust to new travel patterns that emerged after the pandemic.

The activist investor Starboard Value has achieved positive outcomes through its activism at Pfizer and Autodesk and Kenvue. The company’s involvement may result in increased operational focus and capital allocation strategies or potentially initiate a sale process.

The company has not released any statement regarding this matter.