Liberty Expedia Holdings, Inc. (NASDAQ:LEXEA) is a holding company where the majority of the value is derived from its stake in Expedia, Inc., and therefore the stock trades largely in tandem with Expedia. We are bullish on Expedia, the largest online travel agency (“OTA”) in the U.S. and the second largest in the world. We think the investments that Expedia is making in both its core OTA business and in its HomeAway business (acquired in December 2015) that caused a headwind to profitability this year, will ultimately show respectable returns in 2018. We believe we bought the company at a depressed multiple because of near-term earnings headwinds and, in time, we believe the stock has significant upside as these headwinds abate.
From Baron Discovery Fund's fourth quarter 2016 commentary.
