Liberty

Bezos interview from a week ago:

Some interesting threads:

https://abc.xyz/investor/founders-letters/2017/index.html Shareholder letter by Sergey Brin. Mostly about AI.

Speaking of pricing power, charter has been taking a lot less price than the other big cablecos. The idea seems to be to try to get as much volume now as possible, go all-digital, in-source support, make the products better and more straightforward, go quad-play, and then once that's done and churn is super low, then they'll probably flex a bit more pricing. Playing the long term game...

Why would he have taken a lower amount, because the price is down right now? That's not how Malone thinks. Over the past decades, he's shown that his ability to be patient and focus on the long-term is quite high. Besides, the offers weren't cash, and I don't think swapping CHTR for a bunch of probably Sprint or Softbank stock would've been that great a deal... You lose control of the strategic direction of the asset and you dilute it with a bunch of other stuff that might not do as well. If you have something that you think can do well for years to come, you don't rush to sell it unless someone is willing to overpay a lot and with no strings attached to the currency (and taxes won't kill you). You don't get out of a vehicle that you like and control for a quick short term gain, because then you're stuck with a mountain of capital you have to redeploy, or you're stuck with someone else's equity that you have no say over and Malone is scarred by the AT&T debacle. I think if Softbank crosses 5% they have to file, so that'll be interesting to keep an eye on.

It's true that Roberts is good, but it's a bit of an apples to oranges (my fingers first wrote: "apples to organs", that works too) at this point, IMO. On the call they mentioned that a lot of what they're doing now is disruptive to the customer and that this can increase transactions and churn temporarily (swapping set top boxes, changing product packages (names, prices, features), consolidating billing systems, having new call centers phasing in, etc). I think that maybe if Roberts was trying to integrate new businesses that were multiples of the size of what he was before, he'd probably be seeing some impact to his operating metrics too. It's not for nothing that Malone called his vehicle Liberty Broadband.

The question on capex is, will the total amount of capex at the end of the transition be higher than originally forecasted (excluding the mobile stuff), or are they just spending it faster than was expected (in the end adding up to about the amount predicted)? If they are, there could be nice surprises if capex intensity goes down faster than originally expected over the coming year...

Yeah. If you're buying something to own for the long-term, what matters is the earning power over that period. TTM is an arbitrary period that might or might not be representative. In this case, looking at the fact that three very large companies are being integrated together (and the biggest one was the one most in need of catching up) at the same time as they're moving to all-digital at the same time as they're launching a mobile product, I'd say that there's a lot of noise covering the real earning potential. As the CFO said, these things are not linear and there's going to be ups and downs (he said something like: If you look at the legacy Charter transition after this team took it over, it looks smooth if you are standing back, after it was done, but at the time, quarter to quarter, it wasn't. I think we're seeing the same thing). Rutledge also mentioned that video has very little margins and that even if they're off by a million subs or whatever in their predictions, it's not material.

CHTR

It is probably foolish to question malone but is it really cheap? $70B market cap, $70B st debt, $70B lt term = $210B EV. EBITDA at around $16B correct? So after the drop isn't EV/EBITDA 13-14? It appears you're double-counting a lot of debt.

Haven't had time to really look into it yet. I've been traveling so I've got like 7 different earnings to get through. At first glance it seems pretty solid. More video losses than usual, but that's going to move around.

CHTR Q1:

Q1: http://www.csisoftware.com/wp-content/uploads/2018/04/CSI-Press-Release-Q1-2018-Final.pdf Compare $320m in one quarter to the full-year numbers: Looks like the new capital deployment plans are working so far.

Q1: https://s1.q4cdn.com/050606653/files/doc_financials/2018/Q2/Visa-Inc.-Q2-2018-Financial-Results.pdf

Q1:

https://stratechery.com/2018/open-closed-and-privacy/

GOOG ended 2017 with about $46 billion in onshore cash and $64 billion offshore cash. Most of the big tech companies have very little onshore cash (MSFT, AAPL, etc), but GOOG is not one of them. My bad, I misremembered how much of it was offshore. Mea culpa.

I see what you did there.

Until recently the cash was trapped offshore, so it wasn't terrible to wait for an opportunity to bring it back without too much of a tax hit. Of course they could have raised debt in the US and used that for buybacks as Apple has done... But we'll see if they do things differently now that the cash is available in the US.

What value do you assign Youtube, Contra? Do you think that it's not profitable structurally, or that growth expenses are masking profitability right now? Same question for the GCP.

New video by CGP Grey (always interesting, and he doesn't publish them that often, so it's notable). Not what you might think it's about at a glance, so don't judge a book by its cover:

Nice table showing the rise of solar PV (and falling costs): https://www.eia.gov/renewable/monthly/solar_photo/pdf/pv_table3.pdf

Good interview with her here: https://overcast.fm/+JWZR8iPBs

There's been rumors on and off for so long, when (if) it actually happens I'm not sure I'll believe it at first...

Q1: https://abc.xyz/investor/pdf/2018Q1_alphabet_earnings_release.pdf