How Has the Market Reacted to Priceline’s Acquisition of Momondo?



Priceline stock has fallen

The market has reacted positively to Priceline’s (PCLN) acquisition of Momondo. Since Priceline announced the acquisition on February 7, 2017, the stock has gained ~3.2%. Its Chinese online travel partner, Ctrip International (CTRP), has gained ~12.2%.

However, rival Expedia (EXPE) has lost ~1.9% in the same period, while TripAdvisor has lost ~16.4%, mostly due to its lackluster 4Q16 earnings. You can read the detailed analysis in TripAdvisor’s 4Q16 Earnings Overview: More Pain Ahead?

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Year-to-date performance

Year-to-date through February 23, 2017, Priceline (PCLN) stock has risen 11.7%, outperforming rivals Expedia and TripAdvisor (TRIP). Expedia stock has risen 5.6% in the same period, while TripAdvisor stock has lost 6.3%. CTRP stock has outperformed all peers and has risen 20.7%.

Because online travel is a discretionary budget item, it could be compared with the consumer discretionary sector. The Consumer Discretionary SPDR ETF (XLY) has risen 6.3% in the same period. The broader market, tracked by the SPDR S&P 500 ETF (SPY), has risen 5.8% in the same period.

2016 performance

After a disappointing start to 2016, Priceline stock had quite a good run for the year. The stock gained almost 15.2% for the year, while Expedia fell 10.4%. TripAdvisor lost 45.7% of its value in 2016, while Ctrip lost 17.9%. The SPDR S&P 500 ETF gained 8.7% while the Consumer Discretionary SPDR ETF gained 3.7% in the same period.


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