|Bid||88.75 x 1400|
|Ask||88.78 x 1000|
|Day's Range||87.43 - 90.67|
|52 Week Range||40.76 - 139.88|
|Beta (5Y Monthly)||1.54|
|PE Ratio (TTM)||N/A|
|Earnings Date||Nov 04, 2020 - Nov 09, 2020|
|Forward Dividend & Yield||N/A (N/A)|
|Ex-Dividend Date||Mar 09, 2020|
|1y Target Est||96.90|
(Bloomberg) -- IAC/InterActive Corp.’s $1 billion investment in casino operator MGM Resorts International demonstrates media mogul Barry Diller is still a top dealmaker.IAC, a media and internet company with more than 150 brands and products, announced Monday that it built a 12% stake in MGM, just weeks after it spun off online dating behemoth Match Group Inc. “With the separation of Match Group from IAC, and ‘new’ IAC emerging with $3.9 billion of cash, no debt, and its opportunistic zeal intact, we are energized and excited to make this investment in MGM,” Diller, IAC’s chairman, said in a statement. News of the deal caused MGM Resorts shares to jump as much as 25%. IAC shares declined about 2%.One thing that attracted Diller to MGM in particular is an area that currently comprises a tiny portion of IAC’s revenue -- online gaming. That market represents a $450 billion global opportunity, according to IAC, with less than 10% penetration online.In a letter to shareholders, Diller said investors might be surprised by the move. It’s unusual for IAC to purchase a large stake in a public company that currently has relatively little to do with the internet.This veers from IAC’s traditional playbook: buy up small private online companies, roll up competitors, integrate the acquisitions and reap the rewards of scale. The company’s aggressive strategy has created titans like Expedia Group Inc., which Diller still heads as acting chairman despite IAC spinning it off back in 2005. Four years later, IAC shed HSN TV, Ticketmaster, Interval International and Lending Tree. In July, IAC spun off Match -- but only after it had grown into the biggest dating app provider in the world by hoovering up more than 45 different online dating brands, including Tinder, Hinge and OkCupid. “We’ve been restructuring this company for 20 years,” Diller said in an interview on Bloomberg TV back in 2016.The 78-year-old billionaire businessman, who made his fortune as a Hollywood mogul, has been busy this year. He stepped in to take the reins at Expedia after the board ousted the former chief executive officer, led the company’s earnings conference call with analysts in February and oversaw a staff reduction that eliminated 3,000 workers before travel bans and lockdowns caused bookings to tumble 85%. While Expedia went into crisis mode, IAC’s existing portfolio of internet companies, which includes HomeAdvisor and the video app Vimeo, flourished as the virus pushed more business to online platforms. And he presided over the Match spinoff.Diller, who has been a dogged dealmaker for more than two decades, sees opportunity in chaos. Rather than waiting for pandemic to end before making his next move, he has instead rolled the dice on MGM Resorts with IAC’s biggest investment since acquiring Ask Jeeves in 2005 for $1.85 billion.“Although we would never ‘bet the company,’ we know that this is a large bet for IAC,” Diller and IAC Chief Executive Officer Joey Levin wrote in the letter to shareholders. “IAC has always been opportunistic with its capital, and if ever there was a time, this moment is unique,” they said in the letter, adding that the deal presents a “once in a decade opportunity” for IAC to invest in a large category with a great potential to shift online.MGM Resorts welcomed IAC as a “long-term strategic partner” and said it intended to invite them to join the company’s board of directors. “IAC’s expertise in growing and expanding brands online is a natural fit for our focus on enhancing the resort experience through curated and personalized offerings, as well as digital enhancements in sports betting and online gaming,” MGM Resorts CEO Bill Hornbuckle said in a statement. “We welcome their collaboration and are excited at the possibilities it will bring.”MGM, like other casino operators, has been hit hard by the coronavirus, which triggered a months-long closing of its properties in the U.S. and a severe contraction in Macau. The company is in a position to weather the storm, having sold nearly all of its resorts to investors in a sale-leaseback arrangement that freed up billions in cash. Still, MGM has cut staff and furloughed others as it copes with far less business due to the virus.The company last month gave its CEO position permanently to Hornbuckle, a company veteran who had been acting CEO since March. In a previous role, as marketing chief, Hornbuckle spearheaded MGM’s customer-loyalty program, which IAC cited as one of the enticing aspects of the company.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Barry Diller's IAC/InterActive Corp said on Monday it has bought a 12% stake in MGM Resorts International for about $1 billion, sending the casino operator's shares soaring 14%. The investment comes at a time when the gambling industry has been ravaged by government restrictions on movement due to the COVID-19 pandemic, as well as fears about public gatherings. MGM reported a 91% fall in revenue in the latest reported quarter and has slashed its dividend to weather the impact of the health crisis on its financials.
(Bloomberg Opinion) -- In the late 1990s, when David Boies(1) prosecuted the Microsoft antitrust trial, he told me that despite the thousands of documents, emails and deposition transcripts that were rolled into court each day, no more than 50 were the key to the government’s case. He memorized them and knew right where to find them if he needed them in the middle of a cross-examination.Of those 50, maybe two dozen were the kind you just don’t forget — bald, vivid illustrations of what the government hoped to prove: that Microsoft was using its monopoly power to squeeze Netscape, the upstart browser company that Microsoft viewed as a potential threat to its Windows monopoly.“How much do we need to pay you to screw Netscape?” Microsoft founder Bill Gates asked, according to an email recapping a meeting with AOL executives. (He added, “This is your lucky day.”)In another email, Gates suggested that Microsoft offer Intuit “something like $1M … in return for switching browsers” from Netscape to Microsoft’s Internet Explorer.There were plenty of others just like those. Collectively, they showed Microsoft was willing to use every trick in the monopolist’s handbook to “cut off Netscape’s air supply,” to use another memorable phrase that came out of the trial: offering financial incentives to computer makers that stopped pre-installing Netscape; giving away its browser free; leveraging its operating system to favor its own browser over its rival’s.If you read about the recent hearing before the House Judiciary Committee antitrust subcommittee, you already know why I took this little trip down memory lane. The news articles focused on what was said during the five-hour hearing, both by the lawmakers asking the questions and the four tech CEOs who were answering them — Amazon’s Jeff Bezos, Apple’s Tim Cook, Facebook’s Mark Zuckerberg and Google’s Sundar Pichai.But the committee also posted on its website a handful of internal emails the companies had turned over. My colleague Tara Lachapelle made the point that the nation’s primary competition law, the Sherman Antitrust Act, was enacted more than 100 years ago and was aimed at then-dominant businesses like railroads. Preventing abusive monopoly practices by today’s dominant technology companies has proved to be difficult in part because antitrust law never anticipated the business models that have made Google, Facebook and others so powerful.Up to a point, I agree. That’s why a new breed of antitrust thinkers such as Lina Khan (who is working with the Democrats on the antitrust panel) and the economist Hal Singer have developed new ideas for reining in Big Tech. But the emails suggest that even without passing new laws, a lot can be done to stop Big Tech’s monopolistic practices. There are enough similarities between those old Bill Gates emails and the documents released by the antitrust panel to make me think that a few good old-fashioned lawsuits might well do the trick.Let’s take a look at what the committee unearthed from Facebook, Amazon and Google,(2) shall we?“Instagram is eating our lunch,” begins an internal Facebook discussion. “We should have owned this space but we are already losing quite badly. … I find myself checking it far more often than FB mobile. It is a far more focused, compelling way to keep up with what my friends are doing.”Someone in the discussion responds, “Isn’t that why we’re building an Instagram clone?”In another email, Zuckerberg considers a different way to deal with the new competition: “Yeah, I remember your internal post about how Instagram was our threat,” he writes to an executive whose name has been redacted. “One thing about startups though is that you can often acquire them. I think this is a good outcome for everyone.” Which of course is what happened: Facebook bought Instagram for $1 billion in 2012. It was an excellent outcome for Facebook but not so much for anyone who hoped to see competition among social media companies.Amazon:“More evidence these guys are our 1 short-term competitor,” read a 2009 email referring to Diapers.com. “As I’ve mentioned to each of you, we need to match pricing on these guys no matter what the cost.” Another email in the same chain read, “They may be giving us a run for our money. We can approach them through the ‘We would be willing to explore a range of relationships’ angle.” In 2011, Amazon bought Diapers.com’s parent company, Quidsi, for $545 million. (It shut down the brand in 2017).During the hearing, Democratic Representative Pramila Jayapal confronted Bezos with reports that Amazon used data it gleaned from firms that sell their wares on the company’s platform to favor its own competing products. Bezos responded by saying that while that was against company policy, “I can’t guarantee you that policy has never been violated.” Google:Most of the Google documents released by the committee had to do with acquisitions — of DoubleClick and YouTube especially — but there was one in particular that caught my eye. It was about “verticals,” in which Google uses its main search engine to promote its own industry-specific products in areas such as travel and local business reviews over those from companies such as Expedia and Yelp. At the time the email was written, the company was trying to decide whether — and how — to start offering verticals. “What is the real threat if we don’t execute on verticals?”a) “Loss of traffic from google.com … .b) Related revenue loss to high spend verticals like travel.c) Missing oppty if someone else creates the platform to build verticals.d) If one of our big competitors builds a constellation of high quality verticals, we are hurt badly.”Google of course did begin offering “high quality verticals,” and companies such as Yelp have complained to antitrust regulators ever since that Google is using its platform to favor itself at the expense of companies that rely on it for their lifeblood.Even though antitrust law might need to be amended to clarify what is —and isn’t — acceptable practices by the big tech companies, these emails and documents show that there is already enough evidence to file antitrust lawsuits. “Mergers and acquisitions that buy off potential competitive threats violate the antitrust laws,” Jerry Nadler, who is chairman of the Judiciary Committee, said to Zuckerberg. “In your own words, you purchased Instagram to neutralize a competitive threat.”Amazon’s practice of losing money on a product to hurt a rival isn’t all that different from Microsoft giving Internet Explorer away free knowing that would make it difficult for Netscape to compete. Google using its platform — a platform thousands of companies can’t live without — to favor itself is also similar to Microsoft behavior the Justice Department viewed as illegal.Would these lawsuits take years to play out in the courts? Yes. But the common complaint that technology moves too fast for the court system is wrong. Microsoft lost at the trial stage, and although much of the district court’s decision was overturned on appeal, that had less to do with the facts than with the judge, Thomas Penfield Jackson, who had foolishly talked to certain reporters behind the scenes during the trial. In the end, though, the Justice Department won. In 2001, Microsoft settled with the federal government; more important, its behavior changed. Microsoft ended its abusive practices. Operating systems became less important. Google, Facebook and Amazon were all able to emerge without having to worry about threats from Microsoft.Google, Facebook and Amazon can also be forced to end their abusive practices. What’s needed is an antitrust department willing to take the companies to court. Thanks to the congressional panel, the evidence is already there.(Corrects the given name of Lina Khan in the eighth paragraph.)(1) My wife has been Boies’s longtime media adviser. But she had no connection to him — or me, for that matter — when I covered the Microsoft trial for Fortune magazine.(2) The committee released emails from Apple as well. The primary antitrust issue with Apple is the power of its app store to help or hurt companies offering apps. Although many of the Apple emails related to app store issues, the antitrust implications of most of them was not readily apparent.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Joe Nocera is a Bloomberg Opinion columnist covering business. He has written business columns for Esquire, GQ and the New York Times, and is the former editorial director of Fortune. His latest project is the Bloomberg-Wondery podcast "The Shrink Next Door."For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.