Liberty Posted March 16, 2014 Share Posted March 16, 2014 This one has been discussed in other places (mostly the LMCA thread), but I think it deserves its own home. I've been looking into it a bit, but it's not a company I understand too well. I know that many people here own it, and I'd really appreciate it if they shared their thesis on it (I suppose the most common one is probably: Malone is recreating TCI outside the US in cable markets that aren't as mature and a lot more fragmented). There's a recent overview of Liberty Global here: http://oraclefromomaha.wordpress.com/2014/03/09/liberty-global-deep-dive-into-media-companies-series-part-1/ Link to comment Share on other sites More sharing options...
jay21 Posted March 16, 2014 Share Posted March 16, 2014 Thanks. This one is interesting (as are most Malone companies). As well he should. LBTYA was built off the carcass of UCOMA UnitedGlobalcom and Fries was the UCOMA COO when Liberty Media International took it over. UCOMA was a crappily run, family owned business (Gene Schneider then CEO) that got way overleveraged. Who's the white knight, well John Malone of course. For those who have been around the block with Malone does this sound familiar (SiriusXM hint hint). UCOMA valuation (0.2155 shares of Liberty per UCOMA share) was awful in the acquisition and a lot of UCOMA shareholders bailed afterward (me included). IT was a big mistake. Freed of the Schneider's meddling and the debt burden, Mike Fries did a great job building out LBTYA. Thanks for the background, roger. Do you have any thoughts on Global atm? I was very interested in this one for the following reasons: - appeared to be employing a roll up strategy of European assets - Malone saying even recently that one should diversify away from US and the bargains are in Europe - does not appear to be over valued based on TEV/EBITDA - increased buy back However, I ended up throwing in the too hard pile (for now at least): - multiple countries = different regulatory environments, demographics, competitors etc. - my own ignorance of the industry and technology I have just started to do some real work on Global but the low broadband penetration seems to me to be very enticing. For example, as of the beginning of 13, the broadband penetration in Germany was 18%. Based on the 2012 numbers, I could see them adding something on the order of 6mm broadband subs in Europe over time. With the Virgin Media and Ziggo deals, that number is probably ultimately going to be higher. Given the margin characteristics of broadband, it seems like that increase in subs would represent a significant driver for FCF growth over time. Recent BBG article: http://www.bloomberg.com/news/2014-03-12/liberty-global-to-roll-out-pan-european-mobile-platform.html "Liberty Global will put together a so-called mobile virtual network operator system, or MVNO, the name given to companies that use other carriers’ wireless infrastructure for their own mobile services, Senior Vice President Manuel Kohnstamm said in a interview yesterday in Amsterdam. “We’re working on a deep MVNO, and we don’t only do that in Austria but in the whole of Europe,” Kohnstamm said. “We’re constructing a pan-European MVNO platform.” Liberty Global will be able to keep margins high because, as a European cable TV operator, the company runs one billing system, one back-office and one back-haul, which connects the core network to the smaller subnetworks, he said. The company is introducing the MVNO network in the Netherlands, Belgium, Switzerland, Austria and the U.K., Kohnstamm said." Link to comment Share on other sites More sharing options...
sethatk Posted March 20, 2014 Share Posted March 20, 2014 So Buffett, or one of the T's bought in at an average of $81 and now it is around $42. This gets my attention! Link to comment Share on other sites More sharing options...
racemize Posted March 20, 2014 Share Posted March 20, 2014 So Buffett, or one of the T's bought in at an average of $81 and now it is around $42. This gets my attention! There was a split or something of that nature (perhaps a C share dividend). Link to comment Share on other sites More sharing options...
sethatk Posted March 20, 2014 Share Posted March 20, 2014 Sorry, just noticed the split on 4 March. Link to comment Share on other sites More sharing options...
LowIQinvestor Posted April 7, 2014 Share Posted April 7, 2014 Any real reason (news) for why the stock is down 6% today? I am new to Liberty but is it speculation about the Ziggo deal not getting approved? Anyone have thoughts? Getting interested in buying.... Link to comment Share on other sites More sharing options...
Liberty Posted April 7, 2014 Author Share Posted April 7, 2014 Any real reason (news) for why the stock is down 6% today? I am new to Liberty but is it speculation about the Ziggo deal not getting approved? Anyone have thoughts? Getting interested in buying.... I think it's just the general market. I'm seeing tons of things that are down 3-6% today. Link to comment Share on other sites More sharing options...
saltybit Posted May 11, 2014 Share Posted May 11, 2014 Liberty Global and Discovery Communications buy All3Media http://www.theguardian.com/media/2014/may/08/all3media-sold-discovery-liberty-global-deal Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted June 28, 2014 Share Posted June 28, 2014 Does anybody know what this is? [John Malone] entered into a long-dated post-paid variable forward sale contract with an unaffiliated counterparty relating to a maximum of 1,100,000 shares of Liberty Global Inc.'s Series C common stock, divided into 20 equal components that mature on sequential trading days over the period beginning on August 17, 2017 and ending on September 14, 2017 http://www.sec.gov/Archives/edgar/data/937797/000112760213019833/xslF345X03/form4.xml Link to comment Share on other sites More sharing options...
ni-co Posted July 9, 2014 Share Posted July 9, 2014 Does anybody know what this is? [John Malone] entered into a long-dated post-paid variable forward sale contract with an unaffiliated counterparty relating to a maximum of 1,100,000 shares of Liberty Global Inc.'s Series C common stock, divided into 20 equal components that mature on sequential trading days over the period beginning on August 17, 2017 and ending on September 14, 2017 http://www.sec.gov/Archives/edgar/data/937797/000112760213019833/xslF345X03/form4.xml This sounds like a definite sale in 2017 with a variable purchase price component that might reflect the stock price development (or track other measurements) until then. Link to comment Share on other sites More sharing options...
Liberty Posted July 14, 2014 Author Share Posted July 14, 2014 Mike Fries at Sun Valley on Liberty Global's strategy: http://www.cnbc.com/id/101830388 Link to comment Share on other sites More sharing options...
Liberty Posted July 17, 2014 Author Share Posted July 17, 2014 http://www.reuters.com/article/2014/07/17/us-bskyb-itv-liberty-idUSKBN0FM0JZ20140717 Link to comment Share on other sites More sharing options...
Liberty Posted July 30, 2014 Author Share Posted July 30, 2014 http://online.wsj.com/articles/next-step-for-liberty-global-content-1406667563 Short interview with Malone and Fries in the WSJ. Gotta love Malone: WSJ: What's the status of Liberty's efforts to buy a majority of motor racing series Formula One jointly with Discovery Communications Inc.? Mr. Malone: We have been engaging in discussions for what seems like an endless period of time. We continue to be interested, but when we have something to announce we'll announce it. You have got to kiss a lot of frogs before you find a prince. At this stage we are still kissing the frogs. WSJ: Why invest in Formula One? Mr. Malone: Sports has been elevated as an area of interest in content because of its real-time nature. The industry has a long tradition of paying up for sports and that becomes even more important as other elements of entertainment programming commoditize. Wonder if I'm the only one who finds it strange to read "Mr. Malone" when he's a doctor..? Oh well, who cares about titles. Link to comment Share on other sites More sharing options...
Yours Truly Posted July 30, 2014 Share Posted July 30, 2014 http://online.wsj.com/articles/next-step-for-liberty-global-content-1406667563 Short interview with Malone and Fries in the WSJ. Gotta love Malone: WSJ: What's the status of Liberty's efforts to buy a majority of motor racing series Formula One jointly with Discovery Communications Inc.? Mr. Malone: We have been engaging in discussions for what seems like an endless period of time. We continue to be interested, but when we have something to announce we'll announce it. You have got to kiss a lot of frogs before you find a prince. At this stage we are still kissing the frogs. WSJ: Why invest in Formula One? Mr. Malone: Sports has been elevated as an area of interest in content because of its real-time nature. The industry has a long tradition of paying up for sports and that becomes even more important as other elements of entertainment programming commoditize. Wonder if I'm the only one who finds it strange to read "Mr. Malone" when he's a doctor..? Oh well, who cares about titles. I would find it odd if all Doctorate holders referred to themselves as Dr. XYZ... I mean we'd have almost all lawyers with a J.D. calling themselves Doctors as well! Link to comment Share on other sites More sharing options...
Liberty Posted July 30, 2014 Author Share Posted July 30, 2014 I would find it odd if all Doctorate holders referred to themselves as Dr. XYZ... I mean we'd have almost all lawyers with a J.D. calling themselves Doctors as well! I totally agree. But it still feels weird to call him Mr. Malone for some reason :-\ Maybe I read somewhere (Cable Cowboys?) that his disciples call him Dr. Malone and that somehow stuck in my subconscious.. Link to comment Share on other sites More sharing options...
Liberty Posted August 5, 2014 Author Share Posted August 5, 2014 Q2 is out: http://www.libertyglobal.com/pdf/press-release/LG-Earnings-Release-Q2-14-FINAL.pdf 239,000 Organic RGU Additions in Q2 and 584,000 YTD Rebased OCF Growth of 7% YTD to $4.3 Billion Adjusted FCF Increased 40% YTD to $1.1 Billion1 Repurchased ~$900 Million of Equity YTD Link to comment Share on other sites More sharing options...
Fat Pitch Posted August 6, 2014 Share Posted August 6, 2014 Q2 is out: http://www.libertyglobal.com/pdf/press-release/LG-Earnings-Release-Q2-14-FINAL.pdf 239,000 Organic RGU Additions in Q2 and 584,000 YTD Rebased OCF Growth of 7% YTD to $4.3 Billion Adjusted FCF Increased 40% YTD to $1.1 Billion1 Repurchased ~$900 Million of Equity YTD I haven't dived too deep into the earnings report just yet, but I quickly glanced at it and noticed FCF for the quarter was $711mm and YTD $1 billion. Is $711mm per quarter the run rate now? I'm trying to get an idea what this company is generating right now, but it seems like they are always making acquisitions to nail it down. Link to comment Share on other sites More sharing options...
Liberty Posted August 6, 2014 Author Share Posted August 6, 2014 I haven't dived too deep into the earnings report just yet, but I quickly glanced at it and noticed FCF for the quarter was $711mm and YTD $1 billion. Is $711mm per quarter the run rate now? I'm trying to get an idea what this company is generating right now, but it seems like they are always making acquisitions to nail it down. Very hard to predict, but the overall trends are quite good IMO. Capital intensity is going down, they're shifting more customers to all digital where ARPUs are higher, and their Horizon platform with even higher ARPUs is growing nicely and has lower churn. Their new investments into content - though still small right now - could be nicely profitable down the line (kind of like how TCI's content investments grew tremendously in value over time and had side benefits on the strategic level). The MVNO projects could also turn into something very valuable, especially if the quad play further reduces churn. So I'm not answering your questions, but overall I quite like what I see. For a business this well management with cash flows this predictable, I don't think it's expensive. And we're close to where Ted Weschler bought it (or was it Todd). Link to comment Share on other sites More sharing options...
ni-co Posted August 8, 2014 Share Posted August 8, 2014 Q2 is out: http://www.libertyglobal.com/pdf/press-release/LG-Earnings-Release-Q2-14-FINAL.pdf 239,000 Organic RGU Additions in Q2 and 584,000 YTD Rebased OCF Growth of 7% YTD to $4.3 Billion Adjusted FCF Increased 40% YTD to $1.1 Billion1 Repurchased ~$900 Million of Equity YTD I haven't dived too deep into the earnings report just yet, but I quickly glanced at it and noticed FCF for the quarter was $711mm and YTD $1 billion. Is $711mm per quarter the run rate now? I'm trying to get an idea what this company is generating right now, but it seems like they are always making acquisitions to nail it down. If they manage to hold their 40% FCF YOY growth rate for Q3 and Q4, they are going to end 2014 at around $2.5bn in FCF or roughly $3.20 per share. At $41.50 per share the FCF yield would be around 7.7% – with a very good chance to keep growing from there. Taking into account the certainty with which this cash is going to keep rolling in, I don't think this is expensive at all. And they have really ample room to grow their business in Europe alone – organically (think cable broadband for businesses) and through acquisitions (think roll-up). At the moment, this is really one of my favorite stocks. Link to comment Share on other sites More sharing options...
Wilson-TPC Posted August 8, 2014 Share Posted August 8, 2014 Be mindful of the nearly 40 bil in debt... EV is double that of the market cap. Link to comment Share on other sites More sharing options...
ni-co Posted August 8, 2014 Share Posted August 8, 2014 Yes. That's exactly why you want to have highly predictable cash flows. Malone likes to leverage his companies up to the hilt when money is cheap. He's really a master at it. Link to comment Share on other sites More sharing options...
Wilson-TPC Posted August 9, 2014 Share Posted August 9, 2014 Yeah but FCF yield is a better measure using EV rather than market cap. Link to comment Share on other sites More sharing options...
dwy000 Posted August 9, 2014 Share Posted August 9, 2014 Isn't FCF calculated after paying interest - ie servicing the debt? FCF should technically be the cash available for shareholders. So wouldn't FCF be more appropriate compared to market cap. Link to comment Share on other sites More sharing options...
Liberty Posted August 9, 2014 Author Share Posted August 9, 2014 John Malone talks about levered free cash flow: Definition of 'Levered Free Cash Flow' The free cash flow that remains after a company has paid its obligations on its debt. The levered cash flow represents the amount of cash left over for stockholders and for investment after all obligations are covered. The levered cash flow can be negative while the operating cash flow is positive if the amount of cash paid to cover obligations exceeds the cash that comes from operations. Link to comment Share on other sites More sharing options...
Wilson-TPC Posted August 9, 2014 Share Posted August 9, 2014 True that makes sense. My mistake. Link to comment Share on other sites More sharing options...
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