What Trivago's IPO Means For Travel Peers

Expedia Inc EXPE hotel search engine Trivago conduct its highly-anticipated IPO this week. Online travel investors are looking to determine the impact that the IPO will have on other stocks, such as Priceline Group Inc PCLN and Tripadvisor Inc. TRIP.

First, it’s important to understand that Expedia holds a 61.6 percent stake in Trivago, meaning what’s good for Trivago investors is good for Expedia investors.

Benzinga took a look back at how competitors in the online travel space reacted to previous IPOs in the market.

Travel Space, In Review

TripAdvisor was spun off from Expedia back in December of 2011. In the first six months following the IPO, shares of Expedia, TripAdvisor and Priceline all soared. Expedia was the biggest winner at +71.5 percent, while TripAdvisor gained 55.4 percent and Priceline jumped 39.2 percent.

Expedia was spun off from IAC/InterActiveCorp IAC back in August 2005. In the first six months following that spinoff, Expedia was the market laggard, falling 2.6 percent. Parent company IAC gained 20.1 percent and Priceline climbed 27.9 percent.

If the past is any indication, shareholders of competitors Priceline and TripAdvisor shouldn’t be fearful of a new competitor on the market.

Trivago expects to sell 28.5 million American depositary shares in the $13–$15 range.