It’s been a rough day for billionaire media mogul John Malone. His company, Liberty Interactive Corp., owns 22 percent of travel site Expedia and its recent spinout, TripAdvisor. Shares in both companies dropped after reporting disappointing fourth-quarter financials, knocking a combined $184 million off of Liberty’s stakes.
TripAdvisor shares tumbled 15 percent today, erasing $132.5 million of Liberty’s stake, while Expedia dropped 5.7 percent after the close of trading, slashing those holdings by another $51.7 million.
It’s the first time the companies have reported earnings since they split up in December. The idea was to separate the faster-growing TripAdvisor, letting investors gain a piece of the site’s expanding advertising revenue without being tied to the more plodding online travel agency.
Until today, the breakup seemed to be going smoothly. TripAdvisor shares were up 25 percent since they started trading on Dec. 7, while Expedia gained 22 over that stretch. Both had more than tripled the S&P 500′s 7 percent gain.
So what happened? TripAdvisor went on a spending spree. The company invested heavily in China and said it will lose money there through 2012, banking on a future payout. Even though revenue topped estimates, adjusted earnings fell short.
For Expedia, the problem is more glaring. Quarterly sales of $787.1 million was almost $30 million less than analysts expected, thanks in part to a 19 percent plunge in worldwide revenue from airlines.
But investors in Liberty don’t seem too bothered. The company, which owns interests in Time Warner, Evite and home-shopping network QVC, fell less than 0.1 percent today to $18.23 and remains up 12 percent for the year. Shareholders may be waiting for Liberty’s own fourth-quarter report on Feb. 23.
Courtnee Ulrich, a spokeswoman for Liberty Media, wasn’t available for comment.