Investing.com -- Shares of IAC (NASDAQ:IAC) climbed 2.2% in pre-open trading Tuesday following the company's announcement of its plan to spin off its entire stake in Angi (NASDAQ:ANGI), a leading platform for home services. The strategic move is expected to reallocate capital and management focus, potentially setting the stage for future mergers and acquisitions (M&A). More importantly is news indicating that media mogul Barry Diller will play a more active role at the company.
The board's decision comes with a significant leadership reorganization. Joey Levin, the current CEO of IAC, will transition to an advisory role and assume the position of Executive Chairman at Angi. Following Levin's transition, the company has stated it does not plan to appoint a new CEO. Instead, IAC's CFO & COO Christopher Halpin and Chief Legal Officer Kendall Handler will report directly to Barry Diller, IAC's Senior Executive and Chairman.
Citi analyst Ygal Arounian commented on the shift, highlighting the potential for greater capital flexibility and M&A activities. "For IAC this represents a notable shift with Mr. Diller set to take a more active role as the remaining executives will now report to him. The Angi spin frees up capital and management mindshare where Mr. Diller has pointed to wanting to build cash for M&A and take bigger M&A swings." Arounian maintains a Buy rating and a $56 price target on IAC stock.
Investors appear to respond positively to the news, signaling confidence in the company's future direction and the potential for value creation through the spin-off. The restructuring and strategic focus on capital allocation and M&A opportunities under the guidance of Barry Diller suggest a new chapter for IAC.
The move is seen as part of IAC's history of building businesses and spinning them off to unlock shareholder value. With Angi set to become IAC's 10th fully independent company, the market will be watching closely to see how this strategy evolves under the company's revised leadership structure.
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