Starboard takes a stake in Tripadvisor. How the activist may bolster value

CNBC

12-07-2025

Business: Tripadvisor is an online travel company. It leverages its brands, technology, and capabilities to connect its global audience with partners through content, travel guidance and two-sided marketplaces for experiences, accommodations, restaurants and other travel categories. Tripadvisor operates through three segments: Brand Tripadvisor, Viator and TheFork. Its Brand Tripadvisor segment is engaged in providing an online global platform for travelers to discover, generate and share authentic user-generated content in the form of ratings and reviews for destinations, points-of-interest, experiences, accommodations, restaurants and cruises. The Viator segment offers travelers a comprehensive online marketplace that provides access to over 400,000 experiences and more than 65,000 experience operators. TheFork segment offers an online marketplace that enables diners to discover and book online reservations at approximately 55,000 restaurants in 11 countries.
Stock Market Value: ~$2.36B ($18.00 per share)
Ownership: 9.01%
Average Cost: $13.92
Activist Commentary: Starboard is a very successful activist investor and has extensive experience helping companies focus on operational efficiency and margin improvement. The firm is known for its excellent diligence and for running many of the most successful campaigns. Starboard has taken a total of 158 prior activist campaigns in its history and has an average return of 22.34% versus 13.18% for the Russell 2000 over the same period.
Starboard intends to engage with Tripadvisor's management and board regarding opportunities for value creation.
Tripadvisor is the operator of three online platforms designed to enhance the travel planning experience. Its legacy business, Tripadvisor.com, is the largest travel guidance platform in the world, with 300 million monthly unique visitors and more than a billion reviews and $900 million in revenue. Viator, a rapidly scaling booking platform for tours and other travel experiences, is expected to do well over $900 million in revenue this year. Lastly, TheFork is a restaurant reservation platform, which is now the largest marketplace for online dining reservations in Europe and is expected to generate over $200 million of revenue this year. Despite owning a trio of market-leading businesses, the company still trades at a heavy discount: around seven-times earnings before interest, taxes, depreciation and amortization versus low to mid-teens for peers and even higher multiples for Tripadvisor historically.
There are a few explanations behind this valuation disconnect. Since its spinoff from Expedia in 2011 and up until just a few months ago, Tripadvisor had poor governance: a controlled ownership by Liberty Media Corp, a dual class share structure and weak shareholder protections such as a plurality voting standard. This was reflected in the election of directors at the 2025 Annual Meeting, where three directors received a large number of withhold votes including Tripadvisor chairman and former CEO of Liberty Media Gregory Maffei, who received over 60% withhold votes. Small, controlled companies don't tend to trade very well, and that is what this was. However, this all changed in April 2025 when Tripadvisor bought back Liberty Media's controlling position and consequently collapsed the dual class structure. While Tripadvisor's share price has appreciated since, it's likely there is still some hangover from Liberty Media's years of control. Secondly, the decline of Tripadvisor's core nameplate business, which saw revenue decrease 7.95% from 2023 to 2024, is certainly a factor. If the Tripadvisor business was the company's only segment, this valuation could be justified. But Viator does as much revenue as Tripadvisor and is growing at double-digit rates. TheFork is also growing at high single digits, has $200 million in revenue, $65 million in EBITDA and can reach margins greater than 20% at scale. While Tripadvisor did have a year of declining sales, it is still a market leader with $900 million of revenue and $250 million of EBITDA with the company expecting a return to growth this year.
Enter Starboard, which filed a 13D announcing that it has taken a 9.01% position in Tripadvisor and intends to meet with the company's board and management team regarding potential value creation opportunities. As is typical in a Starboard investment, there are multiple levers to unlock value here. The first and maybe most likely plan is status quo, which is extremely rare for an activist like Starboard. But if Tripadvisor returns to revenue growth and the other two segments continue to grow revenue and margins, there may be very little to be done here except watch the stock soar as the market starts understanding the company better. If growth does not happen at Tripadvisor, there is an opportunity to run it differently, focusing more on the bottom line than investing for the top line. This is where Starboard has been very valuable in helping companies. Third, while the three businesses have some strategic synergies, if not operational ones, they are run independently and can really show the sum of the parts value through a sale of even just one segment. This is not something that Starboard generally advocates for and is not advocating for it here. But TheFork is a very strategic asset in a space that is ripe with acquisition: Resy to Amex, OpenTable to Priceline Group (now Booking Holdings), and SevenRooms to DoorDash are just a few examples. These deals typically occurred at mid- to high-single-digit revenue multiples. A five-times revenue multiple for TheFork would be a $1 billion valuation, approximately 40% of Tripadvisor's total enterprise value, despite only accounting for approximately 10% of the company's total revenue and 5% of its EBITDA. Finally, there is a potential hidden artificial intelligence value here. With hundreds of millions of users and a 25-year history, Tripadvisor has very valuable and unique data that could be a highly valuable asset for AI providers. Moreover, the company has recently announced partnerships with Perplexity and OpenAI, but the terms of these deals are not public.
Lastly, there is the potential sale of the entire company. While Starboard is not a "sell-the-company" activist, any time an activist engages with a company, it ends up in pseudo-play and any potential acquirer who has been kicking the tires will suddenly have their interest piqued. There have been interested potential acquirers here. In February 2024, Tripadvisor announced the formation of a special committee to evaluate proposals for potential transactions. During the Liberty buyback process, Tripadvisor disclosed receiving multiple acquisition offers, and another bid from a strategic buyer surfaced in early 2025 at $18 to $19 per share. Since then, Q1 results were better than expected, future guidance has improved, and the stock has increased more than 20% year to date. If interest existed then, there is no reason it shouldn't exist now. A sale of the company is not Starboard's agenda here, but the firm is an economic animal with a fiduciary duty to its investors. If an unsolicited offer comes in, the firm will encourage the company to accept it if the activist thinks that it is in the best long-term interest of stockholders.
With an activist like Starboard engaging, it would be remiss of us not to mention the shareholder discontent at Tripadvisor's recent annual meeting. Three directors received at least 45% withhold votes with Jeremy Philips and Chairman Gregory Maffei receiving 56.8% and 69.3%, respectively. Since the company does not have a majority voting standard in uncontested elections, all three directors remain on the board. One might look at this and assume that Starboard is targeting these three directors for a potential proxy fight. While Starboard is no stranger to a proxy fight and will go there if necessary, we do not believe that to be the case here. First, most of the reasons for the withhold votes are no longer relevant, and Maffei — who received the most withhold votes — is a well-respected operator. Moreover, much like Starboard, Maffei is an economic animal who prioritizes stockholder return and is likely aligned with Starboard in recognizing the company's current undervaluation and value accretive opportunities. We think Starboard could add a lot of value here with board representation, but this one seems to feel more like a partnership rather than a battle.