Shares Of Liberty TripAdvisor Holdings Inc. B Shares Left The Penny Stock Station This Week
It’s one of the “tall tales” you hear from traders now and then. So there I was, in this no volume penny stock and then it turned into a 28-bagger. Sound familiar? If it doesn’t, that’s ok because I’m partially joking. But while the stock market is down 600 points, shares of Liberty TripAdvisor Holdings Inc. “B” shares (LTRPB Free Report) have soared from a close on April 14 of $4.51 to highs on the 15th of $134; yes you read that correctly.
Shares of Liberty TripAdvisor Inc. “A” shares (LTRPA Free Report) have climbed from around $2 to highs of $3.48 with more than 20 million shares traded by the early afternoon on Wednesday.
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So What Happened With Liberty TripAdvisor Holdings Stock?
Obviously, there’s something going on right now and amid all of the volatility halts over the last few days, no one seems to know what’s going on with this stock:
Other users on Reddit were mind-blown. Some even wondered how a move like this was even legal. At the same time, many were concerned about the lack of trading volume based on the big move. This is obviously something to keep in mind with any penny stock let alone one that’s up 2,800%.
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Could this simply be a case of a low float penny stock going crazy after some buying came in? In the case of LTRPB, the current O/S sits under 3 million shares. By all accounts, that would fall under the definition of a low float penny stock. But is there more to this story? (feel free to comment with your speculation as well)
What Is Liberty TripAdvisor Holdings?
If you couldn’t guess by the name, it’s got something to do with TripAdvisor. Yes, this is the same TripAdvisor that you’ve probably booked a flight or hotel through in the past. It’s a penny stock? Another “yes”. However, for Liberty TripAdvisor, it holds an ownership interest in TripAdvisor, Inc.
Specifically, as of its most recent 10K from Feb. 19th, as of December 31, 2019, Liberty Tripadvisor “held an approximate 23% equity interest and 58% voting interest in Tripadvisor.” However, TripAdvisor, Inc. is a separate public company (TRIP Free Report).
Needless to say, as the entire travel sector got hit this year, so too did companies like TripAdvisor as well as Booking (BKNG Free Report), Trivago (TRVG Free Report), and Expedia (EXPE Free Report). But just because Liberty TripAdvisor has an interest in TripAdvisor itself, doesn’t mean it’s one in the same.
Most recently, TripAdvisor took on the initiative to provide economic support to local communities impacted by COVID-19. The Tripadvisor Foundation is committing $1 Million to support organizations serving the most vulnerable populations around the world in response to COVID-19. Are people investing in the wrong stock right now?
We saw a similar situation when Zoom Video was making its way to the public markets. Instead of buying shares of “ZM”, investors looking for a cheap way to buy ZOOM Video, bought shares of “ZOOM”; an unrelated company. Given that Liberty TripAdvisor does have ties to TripAdvisor itself, this may not entirely be the case.
Recent Events For Liberty TripAdvisor
The most recent update from the company came in the form of a request for shareholder meeting filed on April 13. On May 19 the shareholder will vote on several topics including:
- A proposal (which we refer to as the election of directors proposal) to elect Chris Mueller and Albert E. Rosenthaler to continue serving as Class II members of our board until the 2023 annual meeting of stockholders or their earlier resignation or removal;
- A proposal (which we refer to as the auditors ratification proposal) to ratify the selection of KPMG LLP as our independent auditors for the fiscal year ending December 31, 2020; and
- A proposal (which we refer to as the reverse stock split proposal) to approve the adoption of an amendment to our Restated Certificate of Incorporation to effect a reverse stock split of our common stock at a ratio of at least 1-for-2 and up to 1-for-20, with the exact ratio within the foregoing range to be determined by our board of directors (or a committee thereof) and publicly disclosed prior to the effectiveness of the reverse stock split.
Could any of these (including a proposed reverse split) be a catalyst behind this recent move for Liberty TripAdvisor stock?
Can Liberty TripAdvisor Stock Go Higher?
This is a question for the ages and one that will only materialize one we figure out what’s happening. In the case of the more liquid LTRPA, shares have plummeted from over $7 to as low as $0.86. In March, the company entered into an agreement with Certares Management LLC where Certares will purchase $325 million of 8% Series A Cumulative Redeemable Preferred Stock. Certares has a long list of travel-related names it has invested in. It was also founded by Greg O’Hara.
He’s got a long list of achievements under his belt including Chief Investment Officer of JPMorgan Chase’s Special Investments Group, Executive Chairman of American Express Global Business Travel and …. drumroll please…Vice Chairman of Liberty TripAdvisor Holding.
But the fact remains, the series B shares of Liberty TripAdvisor have run up thousands of percentage points in just a day. So, a few things to consider here; are there rumors floating around that are unconfirmed?; is there confusion between what TRIP is doing and what Liberty TripAdvisor is doing?; what has sparked the initial run for LTRPB specifically?
I’ll leave that for the comments section below. But be aware that the low float scenario here can work for and against traders quickly. So if Liberty TripAdvisor stock is on your list of penny stocks right now, keep that in mind; and leave a comment below on your thoughts about this move.