Jim Osman is a leading a specialist in spin-off investing opportunities — and the editor of the aptly named, The Edge Spinoff Report. Here he offers his ongoing recommendation for IAC/InteractiveCorp (IAC), calling it a long-term play as Chairman Barry Diller looks to expand his empire.
Following up from its successful Spinoff of Match Group (MTCH) in July 2020 (IAC up +140% since), we continue to recommend entering IAC as a strong long-term play, with a near-term catalyst of Vimeo’s Spinoff as well as Turo’s potential IPO in 2021.
Two months before the July 2020 split, IAC traded at $71. Leading up to IAC’s Spinoff last year of MTCH, IAC’s stock price had a tremendous fall (to pandemic lows of $40).
On the first day of trading for IAC, the stock listed at $103 (+45% return 2-months before its Spinoff) and now trades at $225 today. As we’re nearing that two-month mark, this recent dip in IAC provides an opportunity to enter ahead of the Spinoff.
What will be left for IAC?
1) Care.com (which was acquired in February 2020 for $500m) can see major growth with the major change in the mid-set of how people envision elder care and nursing homes
2) Dotdash (now the next big business in IAC post Vimeo’s SpinOff), is a digital publisher
3) Nursefly, a growing company in the temporary healthcare staffing industry
4) Its fresh 12% stake in MGM Resorts (MGM) for $1bn (Aug 2020) as IAC moves into expanding its empire into iGaming and Esports
5) Its 84.1% stake in ANGI Homeservices (ANGI), the service professional directory and
6) IAC’s other investments.
The Spinoff Date is estimated at early Q2 2021. Meanwhile, we would note that the firm's Investor Day is scheduled for March 24, 2012 (10am ET).