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Expedia CEO Change Spooks Investors, Shakes Market

  • Shares of Expedia Group Inc. fell 12% in extended trading
  • CEO Peter Kern to be replaced by Ariane Gorin
  • Expedia’s Q4 earnings beat expectations, with revenue rising 10%

Introduction

Expedia Group Inc., the popular online travel company, saw its shares plummet 12% in after-hours trading on Thursday. The sharp decline in stock value came as investors expressed nervousness about a recent CEO change, overshadowing the company’s strong quarterly performance. Despite beating expectations for the fourth quarter, Expedia’s shares experienced a significant downturn.

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Expedia’s Strong Q4 Earnings

Expedia reported earnings of $132 million, or 92 cents per share, for the fourth quarter. While this represents a decrease from the $177 million, or $1.11 per share, earned in the same period last year, the figures surpassed analysts’ expectations. Adjusted for one-time items, the company earned $1.72 per share, outperforming the estimated $1.67. Additionally, Expedia’s revenue rose by 10% to reach $2.89 billion.

The Implications of CEO Change

Despite the positive earnings report, Expedia’s CEO, Peter Kern, will be stepping down and handing over the reins to Ariane Gorin. Kern, who has been serving as CEO since 2020, will remain on the board as a member and vice chairman. The change is set to take effect on May 13, 2022. While Expedia’s press release emphasized a smooth transition, investors expressed concerns about the potential impact of this leadership change on the company’s future performance.

Investor Nervousness and Stock Performance

The news of the CEO change weighed heavily on investor sentiment, leading to a 12% drop in Expedia’s shares during extended trading. Despite a 3.3% increase in stock value during regular trading hours, the overall reaction to the leadership transition was negative. Investors are wary of potential disruptions and uncertainties that may arise as a result of the change in management. Expedia’s stock has shown resilience over the past year, but the recent CEO announcement has spooked investors.

Conclusion

Expedia Group Inc. experienced a significant decline in its stock value following the announcement of a CEO change, despite delivering strong earnings for the fourth quarter. The appointment of Ariane Gorin as the new CEO, effective May 13, 2022, has raised concerns among investors, overshadowing the company’s positive performance. It remains to be seen how this leadership transition will impact Expedia’s future trajectory, but for now, the market response suggests that investors are cautious about the company’s prospects.

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