IAC update: part 1
Upcoming posts (in no particular order): IAC part 2, Gartner, Verisk, Visa/Mastercard, Tractor Supply, Apollo, Zoetis (maybe)
Here’s roughly where things stood at IAC in September 2022, when I last wrote up the company:
There was a time, not too long ago, when an investor could treat IAC as a collection of binary early stage bets anchored by a few more mature and profitable entities. To most, IAC’s 12% passive minority stake in MGM, acquired near the COVID lows, was a weird one-off opportunistic gambit that could be marked to market. The real diligence was saved for Angi’s, DotDash, and Vimeo. I don’t think many felt compelled to deep dive into casinos because like, whatever, the $1bn MGM investment comprised just ~9% of IAC’s market cap at the time and it felt like most of the upside was going to come from IAC’s digital assets, not a passive minority stake in a mature brick-and-mortar casino operator.
Psych!! Now Angi’s is melting away as its fixed price offering, launched to great fanfare 2-3 years ago, struggles to find product-market fit. DotDash no longer expects to hit its $450mn EBITDA target next year given the weakness in brand advertising. Vimeo has lost ~90% of its market cap since being spun off last May, as losses have widened, growth has dramatically decelerated off tough COVID comps, and investors have soured on unprofitable growth concepts.
Meanwhile, MGM shares have nearly doubled from the ~$17 price at which IAC first accumulated shares in 2q and 3q 2020. IAC has since added to its MGM stake, first at $45 and more recently in the low-$30s. With valuations in digital growth assets wrecked and its own stock price sliced in half, IAC could have opportunistically acquired another digital lottery ticket or more aggressively repurchased (more of) their own shares. But no. They increased exposure to MGM instead. Today, the $2.1bn MGM position accounts for 35% of IAC’s market cap, making it the second most valuable asset in the IAC complex after DotDash.
Much has changed in the intervening years. Bluecrew, an unprofitable marketplace for temp work, was sold to EmployBridge in 2022 for $50mn in cash and equity. A few years later, Mosaic, a collection of mobile subscription apps, was acquired for $160mn by Bending Spoons, an Italian app developer.
A few of IAC’s more prominent properties were jettisoned as well. Care.com, an online marketplace connecting families with caregivers, was sold by IAC in March 2026 to private equity firm Pacific Avenue Capital Partners for roughly $320 million, about 36% below what IAC had paid to acquire it in 2020. As COVID tailwinds passed, Care’s underlying product deficiencies came unmasked. Subscriber count declined for “8 or 9” consecutive quarters through late 2025.
Angi was another problem child that management at long last offloaded. Many of you will be familiar with this saga. After a series of unsuccessful attempts to drive engagement, Angi – which had traditionally earned fees for matching homeowners to service providers – launched a fully managed booking platform, following the lead of other online lead generators, including Yelp and Zillow, who had similarly assumed greater responsibility for facilitating transactions further down the funnel as Google and Meta siphoned away an ever-larger share of leads up top.
By fixing the price of services, Angi gave homeowners a more convenient offering but put itself on the hook for any cost overruns. The results were disastrous. Angi “lost an embarrassing amount of money” as the fixed-price model was extended to complex, higher-value renovation and roofing jobs. The premise that Angi could use cost data from jobs intermediated through its marketplace to price work accurately turned out to be a fantasy. This strategic misadventure coincided with degrading cost discipline and ongoing culture clashes between between Angie’s List and HomeAdvisor, who continued to operate with separate sales forces and product types.
As a fully independent company, ANGI is now “shrinking to grow”, filtering out lower quality service pros and cutting costs to improve match rates and profitability, even at the expense of revenue. I don’t think I would ever invest in ANGI…too much brain damage, especially with AI presenting fresh unknowns. BUT! It’s worth noting that EBITDA (including stock comp) has steadily improve – $16mn → $75mn → $111mn → $125mn – in each of the last 4 years. Having lost 60% of its value this year, the stock now trades at just under 4x trailing EBITDA with 2x turns of net leverage.
Free of its flailing, non-core businesses, IAC is now left with the following assets: