TripAdvisor 2012 Annual Report Download - page 40

We may need to implement additional systems or transition to other new systems that require new expenditures in
order to function effectively as a public company. For example, we must document and test our internal control
procedures, our management will need to assess and report on our internal control over financial reporting and our
registered public accounting firm will need to issue an opinion on that assessment and the effectiveness of those
controls. Furthermore, if we identify any issues in complying with those requirements (for example, if we or our
registered public accounting firm identify a material weakness or significant deficiency in our internal control over
financial reporting), we may be required to devote additional management attention to rectify those issues, and the
existence of those issues could adversely affect our reputation or investor perceptions of us. There can be no assurance
that our implementation of additional systems or transition to new systems will be successful, or that such
implementation or transition will not present unforeseen costs or demands on our management.
The price of our common stock may be volatile.
There has been a public market for our common stock only since December 2011. The market price of our
common stock is affected by a number of factors, including:
• Changes in earnings estimates or recommendations by securities analysts;
• The announcement of new products or product enhancements by us or our competitors;
• Developments in our industry;
• Developments in administrative proceedings or litigation related to intellectual property rights;
• Changes in governmental regulations;
• Quarterly variations in our or our competitors’ results of operations; and
• General market conditions and other factors, including factors unrelated to our operating performance
or the operating performance of our competitors.
Future sales of shares of our common stock in the public market, or the perception that such sales may occur,
may depress our stock price.
For the period ended December 31, 2012, the average daily trading volume of our common stock on The
NASDAQ Global Select Market was approximately 2.5 million shares. If our existing stockholders or their
distributees sell substantial amounts of our common stock in the public market, the market price of the common
stock could decrease significantly. The perception in the public market that our existing stockholders might sell
shares of common stock could also depress the trading price of our common stock. In addition, certain stockholders
have rights, subject to some conditions, to require us to file registration statements covering their shares or to
include their shares in registration statements that we may file for ourselves or other stockholders. If Liberty or
some other stockholder sells substantial amounts of our common stock in the public market, or if there is a
perception in the public market that Liberty might sell shares of our common stock, the market price of our common
stock could decrease significantly. A decline in the price of shares of our common stock might impede our ability to
raise capital through the issuance of additional shares of our common stock or other equity securities.
Anti-takeover provisions in our organizational documents and Delaware law may discourage or prevent a
change of control, even if an acquisition would be beneficial to our stockholders, which could affect our stock
price adversely and prevent attempts by our stockholders to replace or remove our current management.
Our certificate of incorporation and bylaws contain provisions that could delay or prevent a change of
control of our company or changes in our Board of Directors that our stockholders might consider favorable.
Some of these provisions:
• Authorize the issuance of preferred stock which can be created and issued by the Board of Directors
without prior stockholder approval, with rights senior to those of our common stock; and
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