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Fly News Breaks for October 11, 2019
Oct 11, 2019 | 14:37 EDT
IAC's (IAC) separation proposal from Match Group (MTCH) is not a surprise, but investors want to know what this ultimately means for both companies, Jefferies analyst Brent Thill tells investors in a research note. IAC is losing its "A+ student" and will attempt to highlight its other assets while reviving the "wounded" Angi Homeservices (ANGI) business, contends Thill. Meanwhile, he believes Match's freedom will come at a cost, noting its leverage will likely head towards initial public offering levels. Post the spin, the analyst estimates the remaining IAC portfolio will be a low double-digit revenue grower with low double-digit margins. IAC has historically underperformed the market from the time of a spin announcement to spin completion, says Thill. The analyst, who has a Buy rating on IAC with a $300 price target, adds that's he a buyer of Match shares on weakness. The stock may see pressure in the near-term as over 200M shares will come to market, but the fundamental story "remains one of the best in Internet," contends Thill. Shares of Match are down 3% to $74.07 in afternoon trading while IAC is up 1.5% to 228.35.