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

Firm: Tripadvisor (TRIP)

Enterprise: Tripadvisor is a web-based journey firm. It leverages its manufacturers, know-how, and capabilities to attach its world viewers with companions by way of content material, journey steerage and two-sided marketplaces for experiences, lodging, eating places and different journey classes. Tripadvisor operates by way of three segments: Model Tripadvisor, Viator and TheFork. Its Model Tripadvisor section is engaged in offering a web-based world platform for vacationers to find, generate and share genuine user-generated content material within the type of rankings and evaluations for locations, points-of-interest, experiences, lodging, eating places and cruises. The Viator section presents vacationers a complete on-line market that gives entry to over 400,000 experiences and greater than 65,000 expertise operators. TheFork section presents a web-based market that allows diners to find and ebook on-line reservations at roughly 55,000 eating places in 11 nations.

Inventory Market Worth: ~$2.36B ($18.00 per share)

Activist: Starboard Worth

Possession: 9.01%

Common Value: $13.92

Activist Commentary: Starboard is a really profitable activist investor and has in depth expertise serving to firms give attention to operational effectivity and margin enchancment. The agency is thought for its wonderful diligence and for operating most of the most profitable campaigns. Starboard has taken a complete of 158 prior activist campaigns in its historical past and has a median return of twenty-two.34% versus 13.18% for the Russell 2000 over the identical interval.

What’s taking place

Starboard intends to interact with Tripadvisor’s administration and board relating to alternatives for worth creation.

Behind the scenes

Tripadvisor is the operator of three on-line platforms designed to reinforce the journey planning expertise. Its legacy enterprise, Tripadvisor.com, is the biggest journey steerage platform on the planet, with 300 million month-to-month distinctive guests and greater than a billion evaluations and $900 million in income. Viator, a quickly scaling reserving platform for excursions and different journey experiences, is predicted to do effectively over $900 million in income this yr. Lastly, TheFork is a restaurant reservation platform, which is now the biggest market for on-line eating reservations in Europe and is predicted to generate over $200 million of income this yr. Regardless of proudly owning a trio of market-leading companies, the corporate nonetheless trades at a heavy low cost: round seven-times earnings earlier than curiosity, taxes, depreciation and amortization versus low to mid-teens for friends and even greater multiples for Tripadvisor traditionally. 

There are a number of explanations behind this valuation disconnect. Since its spinoff from Expedia in 2011 and up till just some months in the past, Tripadvisor had poor governance: a managed possession by Liberty Media Corp, a twin class share construction and weak shareholder protections corresponding to a plurality voting normal. This was mirrored within the election of administrators on the 2025 Annual Assembly, the place three administrators acquired numerous withhold votes together with Tripadvisor chairman and former CEO of Liberty Media Gregory Maffei, who acquired over 60% withhold votes. Small, managed firms do not are likely to commerce very effectively, and that’s what this was. Nevertheless, this all modified in April 2025 when Tripadvisor purchased again Liberty Media’s controlling place and consequently collapsed the twin class construction. Whereas Tripadvisor’s share worth has appreciated since, it is doubtless there’s nonetheless some hangover from Liberty Media’s years of management. Secondly, the decline of Tripadvisor’s core nameplate enterprise, which noticed income lower 7.95% from 2023 to 2024, is definitely an element. If the Tripadvisor enterprise was the corporate’s solely section, this valuation may very well be justified. However Viator does as a lot income as Tripadvisor and is rising at double-digit charges. TheFork can be rising at excessive single digits, has $200 million in income, $65 million in EBITDA and may attain margins higher than 20% at scale. Whereas Tripadvisor did have a yr of declining gross sales, it’s nonetheless a market chief with $900 million of income and $250 million of EBITDA with the corporate anticipating a return to development this yr.

Enter Starboard, which filed a 13D saying that it has taken a 9.01% place in Tripadvisor and intends to satisfy with the corporate’s board and administration crew relating to potential worth creation alternatives. As is typical in a Starboard funding, there are a number of levers to unlock worth right here. The primary and perhaps probably plan is establishment, which is extraordinarily uncommon for an activist like Starboard. But when Tripadvisor returns to income development and the opposite two segments proceed to develop income and margins, there could also be little or no to be executed right here besides watch the inventory soar because the market begins understanding the corporate higher. If development doesn’t occur at Tripadvisor, there is a chance to run it in a different way, focusing extra on the underside line than investing for the highest line. That is the place Starboard has been very helpful in serving to firms. Third, whereas the three companies have some strategic synergies, if not operational ones, they’re run independently and may actually present the sum of the components worth by way of a sale of even only one section. This isn’t one thing that Starboard typically advocates for and isn’t advocating for it right here. However TheFork is a really strategic asset in an area that’s ripe with acquisition: Resy to Amex, OpenTable to Priceline Group (now Reserving Holdings), and SevenRooms to DoorDash are just some examples. These offers usually occurred at mid- to high-single-digit income multiples. A five-times income a number of for TheFork can be a $1 billion valuation, roughly 40% of Tripadvisor’s whole enterprise worth, regardless of solely accounting for about 10% of the corporate’s whole income and 5% of its EBITDA. Lastly, there’s a potential hidden synthetic intelligence worth right here. With a whole bunch of tens of millions of customers and a 25-year historical past, Tripadvisor has very helpful and distinctive knowledge that may very well be a extremely helpful asset for AI suppliers. Furthermore, the corporate has not too long ago introduced partnerships with Perplexity and OpenAI, however the phrases of those offers should not public.

Lastly, there’s the potential sale of all the firm. Whereas Starboard is just not a “sell-the-company” activist, any time an activist engages with an organization, it results in pseudo-play and any potential acquirer who has been kicking the tires will abruptly have their curiosity piqued. There have been potential acquirers right here. In February 2024, Tripadvisor introduced the formation of a particular committee to guage proposals for potential transactions. In the course of the Liberty buyback course of, Tripadvisor disclosed receiving a number of acquisition presents, and one other bid from a strategic purchaser surfaced in early 2025 at $18 to $19 per share. Since then, Q1 outcomes had been higher than anticipated, future steerage has improved, and the inventory has elevated greater than 20% yr to this point. If curiosity existed then, there isn’t a cause it should not exist now. A sale of the corporate is just not Starboard’s agenda right here, however the agency is an financial animal with a fiduciary responsibility to its traders. If an unsolicited provide is available in, the agency will encourage the corporate to just accept it if the activist thinks that it’s in the perfect long-term curiosity of stockholders.

With an activist like Starboard participating, it could be remiss of us to not point out the shareholder discontent at Tripadvisor’s latest annual assembly. Three administrators acquired a minimum of 45% withhold votes with Jeremy Philips and Chairman Gregory Maffei receiving 56.8% and 69.3%, respectively. For the reason that firm doesn’t have a majority voting normal in uncontested elections, all three administrators stay on the board. One would possibly take a look at this and assume that Starboard is focusing on these three administrators for a possible proxy combat. Whereas Starboard isn’t any stranger to a proxy combat and can go there if crucial, we don’t consider that to be the case right here. First, a lot of the causes for the withhold votes are now not related, and Maffei — who acquired probably the most withhold votes — is a well-respected operator. Furthermore, very similar to Starboard, Maffei is an financial animal who prioritizes stockholder return and is probably going aligned with Starboard in recognizing the corporate’s present undervaluation and worth accretive alternatives. We expect Starboard might add a number of worth right here with board illustration, however this one appears to really feel extra like a partnership relatively than a battle. 

Ken Squire is the founder and president of 13D Monitor, an institutional analysis service on shareholder activism, and the founder and portfolio supervisor of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments. Tripadvisor is owned within the fund.