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Steven Cohen Snatches Up OpenTable Inc., Again

October 25, 2012 | About:
SAC Capital Advisors’ Steven Cohen purchases back his shareholding of online reservation website, OpenTable Inc. (OPEN), after selling all of his shares of the stock in the second quarter. His most recent stock acquisition, reported on Oct. 23 on GuruFocus Real Time Picks places him at 5 percent ownership with 1,155,392 shares.

Cohen’s holding history with OpenTable dates back since the third quarter of 2010, when he purchased 8,078 shares of the company at an average price of $52.49.



Cohen then added 313,915 shares in the final quarter of 2010.

When OpenTable stock rose a little more than double its value in the first half of 2011, Cohen had decided to drop about 312,000 shares by the end of the year’s third quarter.

After OpenTable’s price recuperated back down more than $20, Cohen hopped back on the saddle and purchased about 78,000 shares in the final quarter of 2011, and almost 70,000 more in the first quarter of 2012, before selling all of his remaining 158,000 shares in the second quarter of 2012.

With its stock remaining pretty positive for the day, about $0.10 up with the trading price of $46.21, OpenTable maintains a market cap of $985.3 million, a P/E (ttm) ratio of 46.9, a P/S ratio of 7.1 and a P/B ratio of 7.4.

Headquartered in San Francisco, OpenTable has more than 25,000 restaurant customers that use its online reservation services to seat customers since its inception in 1998. Its services are available in the U.S., Canada, Germany, Japan, Mexico and the UK; OpenTable also operates toptable, which is the UK’s leading restaurant booking site.

Although it is the only publicly traded online reservation service on the stock market, several lower-priced competitors fully accept the challenges that come with sharing the same market, taking the rivalry against OpenTable head on.

Sites like Harbortouch, Livebookings, Eveve, RestaurantReservations and UReserv all graze a similar, if not identical, concept as OpenTable, some pursuing markets where OpenTable has not yet established a strong presence.

Eveve Restaurant booking systems, whose client base consists of all independent restaurants, has recently announced Denver and Minneapolis as part of its expansion since entering the U.S. market about a year ago. Described as “monopoly markets” in a September Eveve press release, Eveve referenced OpenTable and its single presence in the restaurant reservation market in the two cities.

As with other OpenTable competitors, Eveve has heightened the competition by promoting its affordable prices.

“In Minneapolis, Eveve has proven it can provide an industry-standard reservation system and comparable online reservation volumes, as the previous supplier [OpenTable], at a cost which is tytpically 70 to 90 percent less,” said Timothy Ryan, Eveve’s North American operations president.

London-based Livebookings, operator of Bookatable.com, has agreements with far fewer restaurants compared to OpenTable, but from far more countries, providing real-time reservations for more than 9,000 restaurants in 23 countries, with its services most prevalent in Europe.

Plamen Yankov, restaurant manager of London dining spot, DSTRKT, mentioned in a Livebookings press release that its reservations have increased as much as 60 percent since transferring from OpenTable to Livebookings.

“We have found that since we have signed up to Livebookings, we are attracting more customers that we previously didn’t have before,” Yankov said. “With exclusive marketings via Bookatable, we have attracted more customers with a higher spend per head and who visit on a more regular basis.”

OpenTable is scheduled to announce its third quarter 2012 financial report on Nov. 1. in a conference call at 2 p.m. PST.

In August, it announced a $50 million share repurchase of its outstanding shares of common stock, funded through cash and short-term investments.

OpenTable experienced a 15 percent increase in consolidated net revenues in this year’s second quarter at $39.6 million, compared to the same time last year. Revenues for North America alone totaled $34.5 million, an 18 percent increase compared to the same quarter last year.

For the rest of the year, OpenTable expects its consolidated revenue to range from $33.9 million to $34.6 million.

Since the start of October, Cohen has purchased shares of Plains Exploration and Production Company (PXP) and Superior Energy Services (SPN), in addition to OpenTable.

Also gaining back his shareholding of Plains Exploration and Production Company (PXP) after completely selling all of his shares in the second quarter, his new shareholding of the stock is 6.5 million. Having owned Superior Energy since the second quarter of 2007, Cohen has recently added more than 6.8 million shares to his stake with Superior, boosting his current holding to almost 8 million shares. He is 5 percent owner to both Plains Exploration and Superior Energy.

As the founder of Connecticut-based SAC Capital Advisors, Cohen owns more than 1,800 stocks in his hedge fund, with an equity value of $12 billion.

The food and beverage industry makes up Cohen’s top bought industry, as of the second quarter of this year.

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About the author:

Dianne Tordillo
Dianne Tordillo is staff writer for GuruFocus.com. She reports on a variety of financial news, primarily dealing with investor portfolios and stock trades. Her articles also highlight insider trades, as well as the many useful features of GuruFocus.

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