IAC Interactive's Numbers Suggest It Is Cheap

Like many others, we are not quite sure what to make of IAC Interactive (IACI). IACI incorporates a range of interactive businesses including: Ask.com (the number four search engine property), the Home Shopping Network (HSN), Ticketmaster, Lending Tree and Realestate.com as well as travel business Interval International.

IACI announced in November 2007 a plan to split the business into five separate listed entities. We decided to have a look at the company using the Valuecruncher interactive tool. The approach we have taken is to look at the value of cash flows being produced by the combined entity – to see where the current share price comes out. This is not a sum-of-the-parts valuation where we try to place a value on the component parts of IACI. We are in-effect assuming the break-up does not occur and the business continues as usual.