GoDaddy, News Corp, Fortrea
Starboard pitches three ideas: News Corp should separate Digital Real Estate to unlock ~50% upside, GoDaddy should expand margins to 33%+, and Fortrea can hit 18% peer margins under Tom Pike.
Thesis
Starboard's 2023 Active-Passive Summit presentation covers three new ideas. At News Corp ($12B EV), the implied RemainCo ex-REA Group trades at just 4x EBITDA versus NYT at 15x+; separating REA Group and the Digital Real Estate assets could unlock ~$7B+ of value, implying ~50% upside to ~$33/share. At GoDaddy ($14B EV), management has missed its 2022 Investor Day commitments — revenue short by $500M and EBITDA short by $100M in 2024; Starboard argues that cutting bloated Tech & Development spend can push growth+profitability from 31% to 40% exiting 2024, delivering $10+ FCF/share. At Fortrea ($4B EV, CRO spun from Labcorp), 13% EBITDA margins lag the 18% peer median; CEO Tom Pike — who drove a 425bp margin expansion at IQVIA/Quintiles — can deliver 60-144% upside to $47-$72/share.
SCQA
Starboard uses the 13D Monitor Active-Passive Summit to pitch three new ideas: GoDaddy (small-business web services, $14B EV), News Corp ($12B EV global media portfolio), and Fortrea ($4B EV CRO recently spun from Labcorp).
All three underperform scaled peers — GoDaddy has missed its 2022 Investor Day targets, News Corp's non-REA assets are implicitly valued at only 4x EBITDA versus NYT's 15x+, and Fortrea's 13% margins lag the 18% peer median.
Starboard urges GoDaddy to cut Tech & Development costs to reach 33%+ EBITDA margins, News Corp to separate its Digital Real Estate assets (REA Group and Move), and Fortrea to execute CEO Tom Pike's margin plan toward peer benchmarks.
GoDaddy can reach $10+ FCF/share at ~7x FCF multiple. News Corp offers ~50% upside to ~$33/share via sum-of-parts. Fortrea has 60-144% share-price upside ($47-$72) at normalized margins.
The three reasons
- 1
News Corp ex-REA Group trades at just 4x EBITDA versus NYT at 15x+ — separation unlocks ~$7B+
- 2
GoDaddy can lift growth+profitability from 31% to 40% by Q4'24 via Tech & Development cost cuts
- 3
Fortrea's 13% EBITDA margins lag the 18% peer median; CEO Tom Pike drove +425bps at IQVIA
Primary demands
- GoDaddy: cut Technology & Development spend and drive Adj. EBITDA margins from 28% exiting 2023 to 33%+ exiting 2024
- GoDaddy: target combination of growth + profitability of 40% exiting Q4'24 to deliver $10+ FCF/share in FY25
- News Corp: separate Digital Real Estate assets (REA Group + Move) from the remaining media portfolio
- Fortrea: execute margin-expansion plan toward 18% peer median under CEO Tom Pike
- Pursue CRO precedent-transaction optionality given M&A activity in the space
KPIs cited
Pattern membership
Where this document fits across the library's 12 rhetorical / structural patterns.
Precedents cited
- Tom Pike's margin expansion at IQVIA/Quintiles (+425bps, 2012-2016, 48% outperformance vs S&P)
- New York Times Company trading at >15x NTM EBITDA as valuation comp for Dow Jones
- Starboard's 2022 Active-Passive ideas (Salesforce +39%, Splunk +100%, Wix +12%) as track record
- LabCorp/Covance, Thermo Fisher/PPD, ICON/PRA Health, EQT/Parexel precedent CRO transactions at 13-25x EBITDA
Notable slides (6)
Notes
Conference deck presented at 13D Monitor's 2023 Active-Passive Investor Summit (October 2023). Despite the filename emphasizing 'News Corp,' the deck is a three-idea TMT/Healthcare pitch covering GoDaddy, News Corp, and Fortrea with roughly equal weight (~15 slides each). Opens with a track-record victory-lap on prior-year ideas (Salesforce +39%, Splunk +100%, Wix +12%). Unusual for activist decks: Tom Pike is explicitly praised (not attacked), and his CEO quote is deployed as supporting evidence — not a contradiction. No named villain, no explicit closing-ask slide; deck ends on a Starboard logo page. No current stake percentages disclosed (Starboard's GoDaddy 13D filed Dec 2021 is referenced in a footnote only). Campaign phase tagged 'initial_thesis' because all three ideas are presented as new theses at this summit, though Starboard had owned GoDaddy since 2021.