Getty Images Activist Wants a Sale
Wall Street isn’t buying that Getty Images Holdings GETY +0.80% can be sold, but an activist investor is sticking to that vision.
Getty stock (ticker: GETY) briefly popped this week after investment firm Trillium Capital urged in an open letter for the stock-photo company to find a buyer. Trillium pointed out that shares have languished since Getty went public last year through a special-purpose acquisition company. Shares climbed as much as 10% Tuesday after the release of Trillium’s letter, but those gains were gone in a flash after Wall Street realized it would be tough for Getty to find a buyer, given limited growth opportunities.
“I don’t think private equity even sniffs at this,” Wedbush analyst Michael Pachter told Barron’s. By Pachter’s analysis, the company trades at a “reasonable” 12 times forward earnings before interest, taxes, depreciation, and amortization, or Ebitda. Stronger revenue growth and cost cutting could get Getty stock to 15 times Ebitda, but potential buyers would probably want more upside than that.
Trillium CEO Scott Murray thinks Wall Street is missing the bigger picture.
“We believe there’s a lot of value,” Murray tells Barron’s. He sees a company such as Microsoft (MSFT) as a natural buyer for Getty, and thinks Getty could do more to monetize its vast library of images, videos, and music. “Doing nothing and waiting for the truck to hit you is not a strategy.” Trillium also wants a board seat.
For its part, Getty says it’s “open to constructive insights and engagement with investors.”