Major Internet stocks rose Wednesday, with IAC/InterActiveCorp leading the sector after the Internet conglomerate resolved a months-long legal skirmish with major shareholder Liberty Media Corp.
IAC shares rose 99 cents, or 4.3 percent, to $23.99. In the past year, the stock has traded between $19 and $35.72.
Late Tuesday, the companies said they settled differences over the breakup of IAC, which sets the stage for the company to spin off its HSN home shopping network, Ticketmaster, LendingTree.com and Interval time-share businesses.
Liberty is dropping an appeal it filed last week disputing a March ruling by a judge who sided with IAC head Barry Diller on the breakup plan.
Also, Liberty, which owns about 30 percent of IAC's equity, won't oppose the proposed single-tier voting structure of the spin-offs, which is different from the current dual-share structure at IAC and effectively shrinks its voting power at the spun-off businesses. The remaining IAC business will still have a dual-share structure.
In a client note, Goldman Sachs analyst Jennifer Watson increased her price target to $26 from $23, in a client note, saying that the resolution "alleviate(s) concerns that lawsuits could keep the spins from occurring until late 2008/early 2009."
Meanwhile, shares of Yahoo Inc. rose 50 cents to $27.06 after Tuesday reports from CNBC and The Wall Street Journal indicated billionaire investor Carl Icahn is considering an attempt to oust the company's board in a move to get Microsoft Corp. to resume its efforts to strike a deal with Yahoo.
In a client note, Stifel Nicolaus & Co. analyst George Askew said he doesn't think a proxy battle by Icahn will lead Yahoo to "ask for Microsoft's help as a rescuer."
"In our view, the only way Microsoft returns to the negotiating table is if the current management of Yahoo invites them back and requests a friendly deal at a price close to the $33 per share level," he said.
The analyst kept his "Hold" rating on the stock and said he encourages Yahoo stockholders to consider swapping out of the shares and into Google Inc. shares.
Rival Google Inc.'s stock rose $6.25 to $589.25.
Elsewhere in the sector, eBay Inc. shares rose 21 cents to $31.62, while shares of online retailer Amazon.com Inc. rose 61 cents to $75.17.
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