Investment Idea: IAC InterActive Corp. (IAC)

# IAC InterActiveCorp (IAC) - Investment Idea

## 1. Executive Summary

IAC (IAC) presents a compelling investment opportunity driven by its diversified portfolio of digital assets and a proven track record of incubating and spinning off successful businesses. We believe IAC's current valuation undervalues the potential growth of its key segments, particularly Angi and Vivian Health, and its ability to unlock shareholder value through strategic initiatives.

## 2. Investment Thesis (Bull Case)

The bull case for IAC rests on the following pillars:

*   **Angi's Untapped Potential:** Angi (Angi Ads, Angi Leads, and Angi Services) holds a dominant position in the fragmented home services market. While monetization efforts have faced headwinds, improved execution and a shift towards higher-margin Angi Services could drive significant revenue growth and margin expansion. As Angi matures and successfully converts free leads to paid services, the topline will improve.
*   **Vivian Health's Growth Trajectory:** The healthcare staffing platform, Vivian Health, is capitalizing on the ongoing demand for healthcare professionals. Its technology-driven approach offers a differentiated value proposition compared to traditional staffing agencies, leading to rapid growth and market share gains. As healthcare staffing continues to be strained, Vivian is poised to take more marketshare.
*   **Skilled Capital Allocation & Strategic Flexibility:** IAC has a demonstrated history of acquiring, developing, and spinning off successful businesses. This management team has created value in the past, and we believe they will continue to do so. They maintain a flexible balance sheet which will allow them to continue with this approach.
*   **Undervalued Sum-of-the-Parts:** We believe the market is underappreciating the value of IAC's individual assets, particularly Angi and Vivian Health. The company's "holding company discount" provides an opportunity for valuation upside as these businesses mature and are potentially spun off in the future.
*   **Digital Content Growth:** IAC's portfolio of digital content brands, including The Daily Beast, is positioned for growth through ad revenue, digital subscriptions, and strategic partnerships.

## 3. Key Risks

Several factors could negatively impact IAC's performance:

*   **Angi Execution Risk:** Angi's continued struggles with monetization and integration could limit its growth potential and damage investor confidence. A slow down in the housing market would hurt the remodeling and home repair services Angi facilitates.
*   **Increased Competition:** The internet content and staffing industries are highly competitive. New entrants or aggressive moves by existing players could erode IAC's market share and profitability.
*   **Macroeconomic Headwinds:** Economic downturns could negatively impact consumer spending and advertising revenue, affecting IAC's various businesses.
*   **Integration Risk:** As IAC continues to acquire and integrate new businesses, there is a risk that these acquisitions may not be successful or may not generate the expected returns.

## 4. Valuation Perspective

IAC's current market capitalization of $3.2 billion appears undemanding considering the potential growth of Angi and Vivian Health. Based on peer valuations and discounted cash flow analysis, we believe the sum-of-the-parts valuation of IAC is significantly higher than its current market price. As these segments mature and are potentially spun off, we see substantial upside.