The article says this of WTF, amongst other things (fair use for copyright):
"But where is growth going to come from? Don’t expect Wotif to buy it. For its first five years as a listed company, the logic was to bring Wotif together with online flights and hotels retailer Webjet. But that horse has bolted. Wotif arguably missed its chance last year when Webjet’s share price doubled, and former chief Robbie Cooke is thought to have told some analysts and investors that he regretted passing up the opportunity during his time at the helm. Buying Webjet would have given Wotif another $100 million revenue and $25 million earnings, but perhaps more compelling, would be cross-selling potential and cost savings at a time when both companies are rethinking marketing and investing in their technology. Webjet faces a similar challenges to Wotif and its share have been sold off accordingly." _______
Interesting. WEB's share price looks terrible over 6 months, and bad over 1 year, and WTF has a market cap of $895m, and WEB of $211m. Time for WTF to pounce? Well, WTF has a PE/r of 17.5, whereas WEB still has a PE/r of 30.5, so one could say WEB is still not "cheap" despite the falls. Thing is, WEB escalated rapidly from $2 to $5 over a short period, but perhaps the $2 range- where it generally sat for years- will make it have an appropriate growth level? I reckon WTF will be keeping an eye on WEB's share price.
WEB Price at posting:
$2.65 Sentiment: None Disclosure: Not Held
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