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Uber Picks Dara Khosrowshahi: A Look At Expedia's Performance Under Its CEO
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The business world is buzzing on Monday morning, thanks in large part to the news that ride-hailing behemoth Uber has officially offered its vacant CEO role to Dara Khosrowshahi, the current chief executive of Expedia (EXPE - Free Report) .
Expedia has been a dominant force in the online travel booking space for some time, but Khosrowshahi is almost certainly a less-recognizable name than Meg Whitman of HP (HPE - Free Report) and Jeff Immelt of GE (GE - Free Report) —two candidates rumored to be top choices for Uber.
Khosrowshahi probably owes his under-the-radar status to the fact that Expedia isn’t based in Silicon Valley, and should he accept the position at Uber, his time spent out of the tech industry’s spotlight may relieve some of the pressure that is sure to come with this highly-publicized role.
Of course, we should remember that former CEO and co-founder Travis Kalanick resigned in the wake of a company-wide scandal. Kalanick’s resignation came just a few weeks after Uber fired 20 employees as a result of an internal investigation into widespread claims of sexual harassment and misconduct (also read: He's Out: Uber CEO Travis Kalanick Has Resigned).
Addressing this toxic culture and working to restore Uber’s credibility will likely be Khosrowshahi’s most important tasks at his new company, but investors will also be interested in seeing how the new chief executive produces value for the powerful ride-hailing brand.
After its latest round of funding, Uber reached a valuation of $68 billion, making it the highest-valued private company in the world. However, the company has faced a variety of lawsuits and is apparently still bleeding money, putting a damper on hopes for a blockbuster IPO (also read: Will Uber Be the Hottest IPO of 2017?).
But the hope of taking Uber public relatively soon may have contributed to the Khosrowshahi pick. The Iranian immigrant and Brown University alum helped lead Expedia through its spinoff from IAC (IAC - Free Report) in 2005, and since then, he has consistently delivered value for shareholders.
As we can see, EXPE performed relatively in-line with the S&P 500 for most of the last decade, but the stock has really taken off over the past three or so years. Furthermore, since its spinoff from IAC, the company’s total revenues have jumped from just $2.1 billion to the massive $8.7 billion figure recorded last year.
Khosrowshahi also has plenty of experience with M&As, as Expedia has executed about 20 deals in its roughly 20-year history. Under Khosrowshahi, Expedia has scooped up HomeAway ($3.9 billion), Travelocity ($280 million), Orbitz ($1.6 billion), Wotif ($657 million), and Trivago ($564 million) in just the past four years.
As competition in the ride-hailing space continues to heat up, acquisitions could become a larger part of Uber’s strategy, which means Khosrowshahi’s appointment could pay off further.
Khosrowshahi and Expedia also share a unique similarity with Uber: a massive divesture from China. In 2015, Expedia shed its stake in eLong, effectively ending its operations in the country, while Uber sold its Chinese unit to rival Didi last summer (also read: Uber Gives Up on China, Sells Business to Rival Didi Chuxing).
Expedia’s rise to the $23 billion travel giant it is today has been monumental, and Khosrowshahi has played no small part in that success story. His experience will be certainly be beneficial to Uber, but it goes without saying that this new CEO role will be the most difficult challenge of his career.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
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Uber Picks Dara Khosrowshahi: A Look At Expedia's Performance Under Its CEO
The business world is buzzing on Monday morning, thanks in large part to the news that ride-hailing behemoth Uber has officially offered its vacant CEO role to Dara Khosrowshahi, the current chief executive of Expedia (EXPE - Free Report) .
Expedia has been a dominant force in the online travel booking space for some time, but Khosrowshahi is almost certainly a less-recognizable name than Meg Whitman of HP (HPE - Free Report) and Jeff Immelt of GE (GE - Free Report) —two candidates rumored to be top choices for Uber.
Khosrowshahi probably owes his under-the-radar status to the fact that Expedia isn’t based in Silicon Valley, and should he accept the position at Uber, his time spent out of the tech industry’s spotlight may relieve some of the pressure that is sure to come with this highly-publicized role.
Of course, we should remember that former CEO and co-founder Travis Kalanick resigned in the wake of a company-wide scandal. Kalanick’s resignation came just a few weeks after Uber fired 20 employees as a result of an internal investigation into widespread claims of sexual harassment and misconduct (also read: He's Out: Uber CEO Travis Kalanick Has Resigned).
Addressing this toxic culture and working to restore Uber’s credibility will likely be Khosrowshahi’s most important tasks at his new company, but investors will also be interested in seeing how the new chief executive produces value for the powerful ride-hailing brand.
After its latest round of funding, Uber reached a valuation of $68 billion, making it the highest-valued private company in the world. However, the company has faced a variety of lawsuits and is apparently still bleeding money, putting a damper on hopes for a blockbuster IPO (also read: Will Uber Be the Hottest IPO of 2017?).
But the hope of taking Uber public relatively soon may have contributed to the Khosrowshahi pick. The Iranian immigrant and Brown University alum helped lead Expedia through its spinoff from IAC (IAC - Free Report) in 2005, and since then, he has consistently delivered value for shareholders.
As we can see, EXPE performed relatively in-line with the S&P 500 for most of the last decade, but the stock has really taken off over the past three or so years. Furthermore, since its spinoff from IAC, the company’s total revenues have jumped from just $2.1 billion to the massive $8.7 billion figure recorded last year.
Khosrowshahi also has plenty of experience with M&As, as Expedia has executed about 20 deals in its roughly 20-year history. Under Khosrowshahi, Expedia has scooped up HomeAway ($3.9 billion), Travelocity ($280 million), Orbitz ($1.6 billion), Wotif ($657 million), and Trivago ($564 million) in just the past four years.
As competition in the ride-hailing space continues to heat up, acquisitions could become a larger part of Uber’s strategy, which means Khosrowshahi’s appointment could pay off further.
Khosrowshahi and Expedia also share a unique similarity with Uber: a massive divesture from China. In 2015, Expedia shed its stake in eLong, effectively ending its operations in the country, while Uber sold its Chinese unit to rival Didi last summer (also read: Uber Gives Up on China, Sells Business to Rival Didi Chuxing).
Expedia’s rise to the $23 billion travel giant it is today has been monumental, and Khosrowshahi has played no small part in that success story. His experience will be certainly be beneficial to Uber, but it goes without saying that this new CEO role will be the most difficult challenge of his career.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>