In contrast, Expedia’s stock surged by nearly 5% in response to the news.
Shares of Uber Technologies Inc (UBER) fell nearly 3% at the open on Thursday after reports that it’s exploring a possible bid for Expedia, the $20 billion U.S. travel booking website. In contrast, Expedia’s (EXPE) stock surged by nearly 5% in response to the news.
The potential acquisition would be the ride-hailing company’s biggest to date if finalized. According to the Financial Times, Uber’s interest in Expedia is currently is “very early stage” and it is possible that a deal will not transpire.
According to Bank of America (BofA), “a potential acquisition could make an already-complex Uber story even more complicated.”
However, the brokerage acknowledged the advantages of Uber CEO Dara Khosrowshahi’s previous leadership at Expedia, noting that a merger could enable the combined entity to provide bundled packages.
Given these complexities, BofA indicated that investors might prefer a strategic partnership with the online travel agency over an acquisition.
Meanwhile, Tesla’s ‘robotaxi’ event continues to exert pressure on Uber’s stock. Daiwa downgraded Uber to ‘Neutral’ from ‘Outperform’ with a price target of $84 citing “limited valuation upside and potential risks from a high fixed-cost robotaxi model even under an Uber network.”
Uber’s retail sentiment on Stocktwits has improved slightly, inching into ‘neutral’ (48/100) territory from ‘bearish’ a day ago. Users are split between whether a potential acquisition of Expedia will benefit Uber or hurt its bottom line.
In contrast, retail sentiment surrounding Expedia has completely flipped from ‘extremely bearish’ just a day ago to ‘extremely bullish’ (96/100) territory today.
Uber’s capability to acquire new businesses has been strengthened by its 80% stock surge in the last 12 months, bringing its market capitalization to $172 billion. In February, the company reported its first year of operating profitability.
Uber’s stock is up 36% so far in 2024.
For updates and corrections email [email protected].
Read more: TSMC Stock Surges Pre-Market, Lifting Apple and Nvidia After Quarterly Profit Jump – Retail Rejoices
