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  • haroldinaustin haroldinaustin Feb 27, 2013 9:14 PM Flag

    Will a PCLN, Expedia, or GGOG buy this company out?

    Saw a previous post....don't kow about GOOG, but could definitley see PCLN adding restaurants to their portfolio.

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    • Absolutely not. Look the P/E's for each of those companies, they're between 25 and 35. Buying OPEN at a P/E of about 55 would be very dilutive to those shareholders. Doing a buyout would raise the share price and push the shares closer to P/E of 60. Thus, GOOG and others could generate about twice the shareholder value by buying back their own shares rather than by buying OPEN. Also, there are huge tax advantages to dealing with your own shares rather than buying another company's shares which is perhaps partially why OPEN chose to do a share buyback rather than buyout some of it's competitors. This brings up why OPEN won't be the next Instagram:

      The ignorant point to FB buying Instagram as proof that anything can happen, but FB actually saw it's core business being threatened by Instagram and therefore felt compelled to buy out rather than face a credible competitor. Does GOOG or PCLN see OPEN as a threat to their core business?

      Sentiment: Strong Sell

    • FB, YHOO, TRIP

 
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