Angi Inc. approves amendments and reverse stock split

Angi Inc. (NASDAQ:ANGI), a leading player in the advertising services industry currently trading at $1.84 per share with a market cap of $915 million, has executed significant corporate actions through a written consent by its majority shareholder, IAC Group, LLC, a subsidiary of IAC Inc.

On Tuesday, the consent approved amendments to Angi’s certificate of incorporation and a reverse stock split, set to take effect later under certain conditions. According to InvestingPro analysis, the company maintains a "Good" financial health score, with liquid assets exceeding short-term obligations.

The amendments, which are contingent on the completion of a distribution of Angi’s stock by IAC to its shareholders, include the classification of the company’s board of directors until the 2032 annual meeting, the requirement for shareholder actions to be taken at meetings instead of by written consent, and the adoption of Delaware’s anti-takeover statute (Section 203 of the DGCL).

With the company’s upcoming earnings report scheduled for February 11, 2025, InvestingPro subscribers can access detailed analysis and 12 additional ProTips to better understand the company’s prospects.

Additionally, Angi Inc. plans to implement a reverse stock split at a ratio of one-for-ten, intended to occur prior to the distribution and independent of its completion. The reverse stock split aims to consolidate shares of Class A and Class B common stock, potentially affecting the stock’s marketability and shareholder equity. This move comes as the stock has shown significant volatility, with a beta of 1.86 and a 24.59% decline over the past year, though InvestingPro analysis suggests the stock is currently undervalued based on its Fair Value assessment.

The effective date for the board classification and shareholder action amendments relies on the successful completion of the planned distribution by IAC. However, the reverse stock split is expected to proceed before the distribution, regardless of its finalization.

The changes will not be immediate; they are scheduled to become effective after the close of business on February 14, 2025, which is the record date for determining stockholders entitled to vote on the amendments.

An Information Statement describing the amendments will be distributed to stockholders of record as required by the SEC, with no action effective earlier than twenty days following this mailing. This report is based on the latest 8-K filing by Angi Inc. with the Securities and Exchange Commission.

In other recent news, Angi Inc. has seen a flurry of activity with significant developments announced. IAC, a major shareholder, has revealed plans to spin off its entire stake in Angi, a move that aims to offer Angi full independence. The spin-off, anticipated to be tax-free, is expected to be completed in the first half of 2025. This strategic decision is part of an effort to allow both IAC and Angi to focus on their respective growth opportunities and operational priorities.

Simultaneously, Angi is undergoing a leadership reorganization, with Joey Levin transitioning from IAC CEO to become an advisor and Executive Chairman of Angi. This change is part of a broader leadership reshuffle within IAC, aiming to streamline operations and enhance growth potential.

However, this news has been met with mixed reactions from analysts. KeyBanc Capital Markets and RBC Capital Markets have revised their price targets for Angi, while maintaining an Overweight and Sector Perform rating respectively. Citi, on the other hand, has downgraded its rating from Buy to Neutral, citing a prolonged turnaround expected until 2026. Despite these adjustments, all firms recognize the potential long-term benefits of the spin-off and the value inherent in Angi’s stock.

Both IAC and Angi have reaffirmed their financial expectations for the fourth quarter of 2024, with their respective results to be posted on their investor relations websites. These developments reflect the dynamic nature of Angi’s business environment and the strategic shifts the company is making to navigate its future.

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