Bullish on IAC Inc.

Alright, buckle up, buttercups. Jimmy Rate Wrecker here, ready to dissect the IAC Inc. (IAC) situation. My coffee’s cold, my code editor is open, and my cynicism meter is calibrated. We’re talking about a stock, IAC, that apparently thinks it’s cool to hide its value like a crypto wallet in a hurricane. Insider Monkey, and a bunch of other finance bros, think there’s a serious disconnect between what this thing *is* and what the market *thinks* it is. Let’s dive into this and see if we can crack the code on this “compelling investment opportunity.”

The Undervalued Unicorn: IAC’s Secret Sauce

The basic premise here is simple: IAC is trading at a discount to its intrinsic value. Imagine a super-powered Lego set with a bunch of cool mini-businesses – think Angi, Dotdash Meredith, and a few others. The market, apparently, is treating this Lego set like a pile of generic bricks. The bull case, as laid out by Insider Monkey and their friends, rests on a few key pillars. They see potential in the company’s historical “spin-off” game, management’s “focus on shareholder value”, and the whole damn thing is just way, *way* undervalued.

The main idea is that IAC has been doing this spin-off thing for years. It’s their secret sauce. They spin off parts of their company that are undervalued and then watch them flourish on their own. This allows individual businesses to go at it alone, attracting the right investors. They’re basically playing the same game over and over, and it seems to be working. These spin-offs provide value for IAC shareholders, and the hope is that Angi will be another success story. The thought is that it makes IAC less complex and allows them to concentrate on core growth.

The Angi Algorithm and the Spin-Off Symphony

Let’s talk about this Angi spin-off, which is basically the main act of the show. The plan for IAC, as everyone has seen, is to distribute Angi shares, that’s like giving away about five Angi shares for every IAC share. While Angi’s performance has been a bit of a rollercoaster ride, with a 30% price drop at one point, the spin-off itself is seen as a positive. It’s like giving a band a solo career; the individual businesses get to operate with more focus and agility. And that’s key because it attracts investors specifically interested in *their* unique growth prospects.

So, here’s the breakdown, because I speak finance like it’s code:

• The Premise: IAC holds a bunch of assets. Some are doing okay, some are struggling.
• The Strategy: Spin off the “assets” into their own independent businesses.
• The Goal: Attract investors who specifically want to invest in those businesses.
• The Expected Outcome: The spun-off companies will grow, and IAC shareholders will profit.

The success of these prior spin-offs is what fuels the whole Angi narrative. It’s a precedent. It’s like running the same code with different inputs and expecting a different output. But in the business world, that seems to work. The hope is that Angi, once set free, will find its stride and deliver value. The argument is that this streamlining reduces complexity, which allows management to focus on their key growth initiatives.

Management’s Pivot and the Intrinsic Value Debug

Here’s where it gets interesting, the management, these guys have made some pivots in their strategy. Reports are saying they’re focused on maximizing shareholder value. They’re moving beyond just holding a bunch of assets. They’re taking a much more disciplined approach to investment. Dotdash Meredith, which IAC owns, is going through a turnaround. The idea is that if they can pull it off, plus the expected benefits from Angi, it will create an overall positive outcome.

It’s all about finding the right code to get the right output. The company’s intrinsic value, as calculated by sum-of-the-parts analyses, has revealed that it is heavily discounted, almost half of what the market thinks. That’s a juicy discount, if you ask me, and an opportunity for investors who believe in the long-term potential of these businesses. The management is committed to deploy resources in a way that maximizes returns for shareholders.

AI, the Wild Card, and the Market’s Attention Span

Interestingly, it seems there were some early arguments about IAC supporting critical infrastructure for the AI industry. But that narrative has simmered down recently. The idea was that IAC’s assets could potentially be powering AI data centers.

While the spin-off strategy and intrinsic value are the main focus, the potential for IAC to benefit from the AI revolution is worth noting. They have identified strategic infrastructure and can position themselves for continued relevance. It’s kind of like hedging your bets. It makes the investment case more resilient. So, even with some macroeconomic conditions impacting other sectors, the overall sentiment seems positive.

The financial news has been consistently covering IAC, even with minor stock movements. This indicates the sustained interest.

The System’s Down, Man (But Maybe Not for Long)

So, let’s wrap this up. The bull case for IAC is built on spin-offs, shareholder value focus, and being undervalued. The Angi spin-off is a potential catalyst to unlock value, and the market hasn’t appreciated the potential of IAC’s diverse portfolio and strategic direction. The execution of the spin-off plan, and continued improvements in the capital allocation strategy, could increase share price appreciation, making this a rewarding investment.

My Final Take: Look, I’m not saying to jump in with both feet. The market can be a cruel mistress, and every stock has its own set of bugs. However, the logic here is sound. The company’s history of spin-offs, combined with a disciplined approach to capital allocation, makes IAC an interesting case. If they execute their plan, the market might just wake up and realize what they’ve been missing. If not? Well, there’s always the next version.

• Rating: I’d give it a tentative “buy” rating.
• Risk: High.
• Recommendation: Do your own research, and don’t bet the farm.