IAC Stock - CEO Resigns, Barry Diller Takes Over
Joey Levin steps down as IAC CEO after 10 years. Company founder Barry Diller takes on more responsibilities.
IAC has sent out a surprising restructuring announcement that I cannot leave without comment:
IAC CEO Joey Levin Resigns
On January 13, 2025, as expected, the IAC board of directors approved the spin-off of Angi ANGI 0.00%↑. I had already reported this plan two months ago in my last IAC stock analysis. However, I did not expect that IAC 0.00%↑ CEO Joey Levin would step down as CEO of IAC and focus on the development of Angi as an Executive Chairman. Important to note is that he will continue to serve IAC as an advisor also in the future.
This means that Angi will have an excellent management team after the spin-off, consisting of CEO Jeff Kip and Joey Levin who have worked together very well in the past. Joey Levin was already personally responsible for Angi as interim CEO from October 2022 to April 2024, and after the failure of the "growth at all costs" strategy of the previous ANGI 0.00%↑ CEO, he initiated the turnaround by "shrinking the company down to size", which continues to shape Angi's numbers to this day.
I have no doubt that Angi will benefit from this experienced management team and will be on a profitable growth path by 2026 at the latest.
On the same day, it was also announced that Joey Levin will be appointed to the board of directors of Warner Bros. Discovery WBD 0.00%↑ as an independent member, effective February 1st, 2025. Whether his activities there will have anything to do with the IAC business is open to speculation. I don't want to read too much into that at this point. Instead, I suspect that Joey needs a lot of energy for his new role at WBD and that this new task, in addition to his role at Angi, was a reason for him to give up the CEO position at IAC after 10 years.
Angi Spin-Off Is Destined To Succeed
It is also extremely important for IAC as a whole that the forthcoming Angi spin-off will be a success. This is because IAC has lost a lot of trust in the investment community since Vimeo VMEO 0.00%↑ shares were distributed to IAC shareholders at top prices in 2021 at a valuation of $6 billion.Then they had to watch (unless they sold after the allocation) as their Vimeo shares lost well over 90% of their value within 18 months.
Such a situation must not be repeated if IAC's 25-year success story is not to be completely destroyed. After all, that would be the destruction of the life's work of IAC's founder and major shareholder Barry Diller, who is now 82 years old.
Barry Diller Takes Charge At IAC
So he does what he has done before: In December 2013, then-IAC CEO Greg Blatt took over as a chairman of IAC spin-off Match Group. Barry Diller did not officially return to the role of IAC CEO at that time (as he has not done to this day), but was more closely involved in operational business as executive chairman until Joey Levin was promoted to IAC CEO in June 2015.
Now, almost 10 years later, history is repeating itself: the IAC CEO is moving to a spin-off, and Barry Diller will be even more involved in the operational business as executive chairman. Specifically, Dotdash Meredith, the largest holding, will report directly to Barry Diller through its CEO Neil Vogel. The other holdings will report to COO/CFO Christopher Halpin, who will also report directly to Barry Diller.
The stock market initially reacted negatively to the management shuffle. IAC fell to new lows. Investors are clearly less than enthusiastic about the prospect of the 82-year-old major shareholder running IAC in the future.
I also regret the departure of Joey Levin after almost 10 years at the helm of the IAC. He had 7 great years before a long dry spell in the last 3 years. The acquisition of Meredith in 2021 was poorly timed and far too expensive from today's perspective. I think it's a shame that Joey can't (or won't) take the time to steer the ship back to success. I had expected to see new IAC acquisitions under his leadership in the next few years. That will no longer be the case.
Barry Diller at the helm of IAC can only be an interim solution due to his age. I expect him to appoint a new IAC CEO in the near future, just like he did in 2010 and 2015. In the meantime, he will focus on convincing the capital market of the undervaluation of the IAC stock. This should be easier after the Angi spin-off, which will simplify the corporate structure.
An investment in IAC stock is and will remain a test of patience for us shareholders. Joey Levin's departure is certainly not good news, but it is not a disaster for IAC. Especially since Joey will be involved with the company as an advisor for the long term and will remain a shareholder.
In addition to my IAC position, I started building a position in Angi in my sample portfolio. Since the announcement of the spin-off in November, the share price has been down another -30% to $1.80.
To me, that's a bargain. Angi's enterprise value is now at $1.0b, well below its revenues. That's way too cheap for a digital platform that is a leader in its category. In addition, Angi's turnaround is well advanced and its cash flow is clearly positive. Joey Levin's future intense involvement as an executive chairman is a very important sign of commitment to me. Trust is everything - without trust, nothing matters.
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*Disclaimer: The author and/or affiliated individuals or companies hold shares in IAC and Angi. This post is an expression of opinion and not investment advice.