Expedia Says it is Raising Over $3B in New Capital

Expedia, along with many other travel related companies, has felt a financial burden due to the COVID-19 pandemic.
The company announced this week that it is raising $3.2 billion as travel stalls during the outbreak.

Out of these funds, $1.2 billion will be in private placement of perpetual preferred stock and $2 billion in new debt financing.

Funds managed by affiliates of Apollo Global Management and Silver Lake will provide the equity investment and will each get a spot on the company’s board, according to Expedia. The funding is expected to close May 5th.

The company said it expects the new funds to strengthen its financial flexibility and liquidity position.

Airbnb has also recently raised debt financing to help it ride through the crisis. It raised two separate rounds of $1 billion each this month, one of which included equity and had Silver Lake as a backer.

Expedia Chairman Barry Diller told CNBC last week that the company would not even spend $1 billion on advertising this year. Usually the company spends $5 billion.

Barry Diller, Chairman and Senior Executive of Expedia Group stated on Thursday, “We have one mandate – to conserve cash, survive, and use this time to reconstruct a stronger enterprise to serve the future of travel. We are unable to make any predictions as to when travel will rebound but we emphatically believe that it will, for….’if there’s life, there’s travel.'”

Shares of Expedia are down 43% YTD.

Disclaimer: We have no position in Expedia Group Inc. (NASDAQ: EXPE) and have not been compensated for this article.