The Ratings Game: Expedia spends on ad war, stock pays the price

Expedia Inc. said it was going to spend, but still got punished for it.

Expedia EXPE, -15.47% shed nearly $3 billion of valuation Friday after revealing a profit decline as marketing costs rose faster than revenue. Expedia had warned that it would ramp up spending for an online-advertising war with rivals like Priceline Group Inc. PCLN, -2.27% and TripAdvisor Inc. TRIP, -4.34% , which has weighed on all of their share prices in recent months, as well as other initiatives.

Analysts saw exactly what that looked like with management’s profit projections for Ebitda growth of 6% to 11% Thursday afternoon.

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