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TripAdvisor (TRIP) is surging higher following a Wall Street Journal report that activist investor Starboard Value LP has acquired a 9% stake in the online travel company, valued at approximately $160 mln. This stake, disclosed in a regulatory filing with the SEC on July 3, positions Starboard as one of TRIP’s largest shareholders and signals potential for significant strategic and operational changes. The market’s enthusiastic response reflects investor confidence in Starboard’s track record of unlocking value at underperforming companies, particularly given TRIP’s lackluster stock performance, which has seen a 15% decline over the past 12 months (not including today's gains).

The company’s inclusion in the consumer discretionary sector, coupled with its recent exploration of strategic alternatives, including a possible sale in early 2024, further amplifies the significance of Starboard’s involvement as a catalyst for change.

• Starboard’s investment is fueling TRIP’s rally due to the hedge fund’s reputation for driving transformative changes at undervalued companies, as well as the market’s belief that the stock, trading at a market cap of approximately $2.0 bln, is significantly underpriced relative to its potential. Starboard’s SEC filing explicitly states that it views TRIP’s shares as “undervalued and an attractive investment opportunity,” and the firm intends to engage with management and the board to explore “opportunities for value creation.”
• Potential actions, based on Starboard’s history with companies like Darden Restaurants (DRI), Kenvue (KVUE), Pfizer (PFE), and Autodesk (ADSK), include pushing for operational efficiencies, cost reductions, management shake-ups, or strategic divestitures. Given TRIP’s rejection of multiple takeover offers in the past year, Starboard may advocate for revisiting a sale, restructuring the company’s capital allocation, or enhancing the monetization of its high-growth subsidiaries, Viator and TheFork, which have outperformed the core TripAdvisor platform.
• The activist’s involvement could also lead to board composition changes or a push for a new CEO to address the stock’s underperformance, which has lagged the Dow Jones U.S. Travel & Leisure Index’s 10.5% gain in 2025.
• TRIP’s stock has been weighed down by several structural and competitive challenges, most notably the slowing growth of its namesake travel review platform, which has struggled to maintain relevance in a highly competitive online travel market. The company’s share price has significantly underperformed competitors like Booking Holdings (BKNG), which gained 9% over the past three weeks, and Expedia Group (EXPE), which has benefited from stronger growth in its B2B segment.
• TRIP’s Q1 earnings, reported on May 7, 2025, showed revenue of $398 mln, up 1% yr/yr, with this modest growth driven by its Viator (experiences marketplace) and TheFork (restaurant booking) segments, which posted strong double-digit gains, while the core TripAdvisor brand saw revenue decline by 8%. The company’s EBITDA margin of 11% trails competitors like BKNG, which reported a 30% EBITDA margin in its latest quarter, highlighting TRIP’s operational inefficiencies.
• Additionally, TRIP faces intense competition from Google’s (GOOG) travel search tools, Airbnb’s (ABNB) experiences platform, and emerging AI-driven travel planning tools, which have eroded its market share. The formation of a special committee in early 2024 to explore strategic options, including a potential sale, underscores the board’s acknowledgment of these challenges, yet the rejection of takeover offers has frustrated investors, contributing to the stock’s depressed valuation.

TRIP’s stock is surging today due to Starboard Value’s 9% stake and its intent to drive value creation, signaling potential operational, strategic, or leadership changes that could unlock the company’s undervalued potential. With a proven activist track record and TRIP's underperforming stock, Starboard’s involvement is a powerful catalyst.