scorpioncapital Posted January 14, 2020 Share Posted January 14, 2020 I do believe global with 7 billion in cash can buy out every single altnet with zero regulatory problems. In fact it may be cheaper than to do its own fiber buildout, or to supplement it. If an altnet gets in trouble or is cheap they could pounce. Link to comment Share on other sites More sharing options...
rogermunibond Posted January 14, 2020 Share Posted January 14, 2020 What's the latest with Sky Broadband joining the Liberty Fibre JV? Talks were ongoing in Sept and Fries made positive remarks on the 3Q call in November iirc. Link to comment Share on other sites More sharing options...
ander Posted January 15, 2020 Share Posted January 15, 2020 Looks like Severina Pascu replaces Bill Castell who was acting CFO since Aug 2019. DENVER, Colorado--(BUSINESS WIRE)-- Liberty Global plc(LBTYA) (“Liberty Global”) , one of the world’s leading converged video, broadband and communications companies, announced that Severina Pascu will join Virgin Media as Chief Financial Officer (CFO) and Deputy Chief Executive Officer (CEO) effective February 1, 2020. Ms. Pascu is currently CEO of Liberty Global’s Swiss operations, UPC Switzerland, and will be succeeded in that role by Baptiest Coopmans, Senior Vice President Operations for Liberty Global(LBTYA) and a key executive with the company for the past seven years. In addition to leading the finance function at Virgin Media, Ms. Pascu will take on responsibility for customer service and field operations as well as logistics and supply chain, reporting to Virgin Media CEO Lutz Schüler. She will also continue to be a member of Liberty Global’s Executive Leadership Team. “This is an exciting moment for Virgin Media,” said Mike Fries, CEO Liberty Global(LBTYA). “Severina is a world class operator and finance executive. She’s done extraordinary work executing our turnaround plan in Switzerland and will be a critical partner to Lutz at Virgin Media. They will be a powerhouse team.” “Severina has a fantastic track record in telecoms markets across Europe and has extensive operational and strategic experience which will be invaluable to us at Virgin Media,” said Schüler. “I’m looking forward to Severina joining the team next month as we continue to transform our business and embark on an exciting new growth chapter to help us realize our ambition to become the most recommended brand in our sector for our people and customers.” Ms. Pascu started her career with Liberty Global(LBTYA) as CFO of UPC Romania in 2008 and has grown into a strong operator with transformation experience across operations in Central and Eastern Europe. She has held positions ranging from CEO of Romania and Hungary and later for all of Liberty’s Central European businesses, culminating in being CEO of UPC Switzerland. She has a proven track record in finance and operations with a strong focus on customer service, new product innovation and team management. Pascu said: “I am delighted to join Virgin Media at such an exciting time for the company and the industry. Virgin Media is an incredible brand and I am looking forward to working with such an amazing team. I leave a strong team in Switzerland with a solid plan to bring UPC back to growth and I am confident that Baptiest will provide strong and stable leadership there.” Mr. Coopmans joined Liberty Global(LBTYA) in 2013 as the CEO of UPC Netherlands, where he led its merger of UPC with Ziggo to become the leading national cable operator, and the subsequent creation of VodafoneZiggo, the largest fixed-mobile converged challenger in the Netherlands. He currently oversees technology, network and operations for Liberty Global(LBTYA) across Europe as well as the services it delivers to other operators. In his new role Mr. Coopmans will also oversee Liberty Global’s operations in Poland and Slovakia and will be on Liberty Global’s Executive Leadership Team, reporting to Mike Fries, CEO. “Baptiest is a great fit for the UPC team,” said Fries. “He has CEO experience and has done excellent work reshaping our operating model to drive reduced costs and greater efficiency. There’s still hard work to be done in Switzerland and Baptiest is well positioned to take the reins.” Link to comment Share on other sites More sharing options...
Mungerish Posted January 15, 2020 Share Posted January 15, 2020 The more work I do on this, the more I am beginning to think it belongs in the Too Hard pile. So many regulatory agency/issues to deal with. Risk of Technological obsolesce. Risk of Capital Misallocation by Fries. Declining subs/users ( Shared passwords on OTT platforms is a real thing in US among milennials), etc, etc. It's not a melting ice cube, but potentially not a great business going forward and betting on cash flows could result in getting into almost like a Tontine with no catalyst. Malone is great and can't see him letting that go on forever, but he's not getting any younger. Again, it seems like they will follow a CHTR like playbook, but not sure they will be rewarded in the UK and Euro land the same way given the lower ARPU's etc. I'd be curious to hear the other side of this argument Link to comment Share on other sites More sharing options...
ander Posted January 15, 2020 Share Posted January 15, 2020 Why do you think they won't be given credit because of the lower ARPU's. Ultimately if they do "Charterize" it and increase cash flow, isn't everyone focused on aggregate FCF? and if so, why wouldn't they get credit? The more work I do on this, the more I am beginning to think it belongs in the Too Hard pile. So many regulatory agency/issues to deal with. Risk of Technological obsolesce. Risk of Capital Misallocation by Fries. Declining subs/users ( Shared passwords on OTT platforms is a real thing in US among milennials), etc, etc. It's not a melting ice cube, but potentially not a great business going forward and betting on cash flows could result in getting into almost like a Tontine with no catalyst. Malone is great and can't see him letting that go on forever, but he's not getting any younger. Again, it seems like they will follow a CHTR like playbook, but not sure they will be rewarded in the UK and Euro land the same way given the lower ARPU's etc. I'd be curious to hear the other side of this argument Link to comment Share on other sites More sharing options...
Munger_Disciple Posted January 15, 2020 Share Posted January 15, 2020 The more work I do on this, the more I am beginning to think it belongs in the Too Hard pile. So many regulatory agency/issues to deal with. Risk of Technological obsolesce. Risk of Capital Misallocation by Fries. Declining subs/users ( Shared passwords on OTT platforms is a real thing in US among milennials), etc, etc. It's not a melting ice cube, but potentially not a great business going forward and betting on cash flows could result in getting into almost like a Tontine with no catalyst. Malone is great and can't see him letting that go on forever, but he's not getting any younger. Again, it seems like they will follow a CHTR like playbook, but not sure they will be rewarded in the UK and Euro land the same way given the lower ARPU's etc. I'd be curious to hear the other side of this argument +1 I also wonder if the UK regulators will force Virgin Media to open up their pipes to everyone (like they are doing with Openreach). If that happens, it would really kill the investment thesis. In addition, it seems to me that UK/Euroland is really a different market than the US. If you don't have mobile and fixed services with owner economics, it looks like it is really hard to compete. Link to comment Share on other sites More sharing options...
Mungerish Posted January 15, 2020 Share Posted January 15, 2020 "Why do you think they won't be given credit because of the lower ARPU's. Ultimately if they do "Charterize" it and increase cash flow, isn't everyone focused on aggregate FCF? and if so, why wouldn't they get credit?" If you read the Liberty investor day transcript on CNBC, Rutledge talks about how the thesis of video being less profitable is generally correct but it's still a profitable and VERY important piece to the business. The overall economics are different at LBTYA as I understand them than at CHTR in terms of revenue per sub, skinny bundles, etc. All of that being said, I only know what I read in the papers when it comes to UK/EUR cable and have no direct experience...which adds to the Too Hard pile lean for me Link to comment Share on other sites More sharing options...
scorpioncapital Posted January 15, 2020 Share Posted January 15, 2020 There was some talk of virgin opening the network only to sky, at least the new fiber built, not sure about the hybrid coaxial. Is it allowed according to UK regulation to wholesale only to 1 chosen partner? The UK has been having economic problems lately and are talking even of lowering rates. I'm wondering if telecom in UK is partially depressed due to this. EU seems to have been downsized with really just 3 countries, 2 of which are half owned and Switzerland no doubt they want to exit. Btw pascu was the turnaround lady at Switzerland, I hope this doesn't mean they consider virgin a turnaround situation. Link to comment Share on other sites More sharing options...
colinwalt Posted January 16, 2020 Share Posted January 16, 2020 Liberty chooses new Virgin Media CFO as part of overhaul https://www.ft.com/content/c3d648ae-36c4-11ea-a6d3-9a26f8c3cba4 "Last summer, it established a new investment vehicle — Liberty Fibre — to co-invest in new fully fibre-optic networks beyond its existing UK cable network and go head-to-head with BT. But it has now changed tack and will focus on splitting off Virgin Media’s Project Lightning fibre and cable network into the new venture and establishing it as a wholesale operator that competes directly with BT’s Openreach, according to two people with direct knowledge of the revised plan. The name of the company has already been changed to Liberty Networks. But the plan, which would transfer assets, liabilities and debt linked to Project Lightning off Liberty Global’s balance sheet, is contingent on signing an exclusive wholesale deal with Sky. Top Liberty Global executives met in Florida last week to consider options for the UK business as well as other assets." Link to comment Share on other sites More sharing options...
scorpioncapital Posted January 16, 2020 Share Posted January 16, 2020 It's nice to know global executives are making decisions from balmy Florida instead of being on the ground in the country they are actually doing business in, even if the weather is not so nice ) Link to comment Share on other sites More sharing options...
Spekulatius Posted January 16, 2020 Share Posted January 16, 2020 It's nice to know global executives are making decisions from balmy Florida instead of being on the ground in the country they are actually doing business in, even if the weather is not so nice ) It’s one of the issues with management, imo. Fries works from Colorado. It’s hard to keep grounded so far away from the action. I remember the oil service company Weatherford, who moved their headquarter from Houston to Switzerland, supposedly to save taxes. That didn’t work out well for them. Link to comment Share on other sites More sharing options...
undervalued Posted January 21, 2020 Share Posted January 21, 2020 New broadband unit for wholesale, not really sure what the advantage is for forming this new unit? https://www.bloomberg.com/news/articles/2020-01-21/liberty-global-signals-u-k-expansion-with-new-broadband-unit. If you're using Chrome to open it, you can view the full article if you print it out to PDF (by clicking CTRL+P) w/o having subscription. Did the stock go down 4% because of this news? Link to comment Share on other sites More sharing options...
Lakesider Posted January 21, 2020 Share Posted January 21, 2020 If you're using Chrome to open it, you can view the full article if you print it out to PDF (by clicking CTRL+P) w/o having subscription. Thanks I had no idea you could do this. Link to comment Share on other sites More sharing options...
NotSoWise Posted January 21, 2020 Share Posted January 21, 2020 Jefferies reduced it from Buy to Hold at USD 23. On another note... I think Mike (CEO) should renegotiate his stock option contract from the current USD 30 strike price. To be on the safe side, he should set it at somewhere between USD 12 and 15, with an option to go USD 3-5 lower if things deteriorate further. It is unfair to have it at USD 30 when the price is USD 20. So demotivating, no wonder he manages the business from Colorado. But more seriously, with the recent changes in UK management and buybacks on hold (due to CF/covenants?), doesn't it look like a restructuring? Link to comment Share on other sites More sharing options...
scorpioncapital Posted January 21, 2020 Share Posted January 21, 2020 I believe this is the liberty full fiber venture which will be wholesaled to sky and liberty In house ? Link to comment Share on other sites More sharing options...
ander Posted January 21, 2020 Share Posted January 21, 2020 Disagree re: repricing equity comp. Provides for perverse incentives for the stock price to go down for long periods of time, before ultimately working out. Reality is that he has plenty of "skin" in the game. Jefferies reduced it from Buy to Hold at USD 23. On another note... I think Mike (CEO) should renegotiate his stock option contract from the current USD 30 strike price. To be on the safe side, he should set it at somewhere between USD 12 and 15, with an option to go USD 3-5 lower if things deteriorate further. It is unfair to have it at USD 30 when the price is USD 20. So demotivating, no wonder he manages the business from Colorado. But more seriously, with the recent changes in UK management and buybacks on hold (due to CF/covenants?), doesn't it look like a restructuring? Link to comment Share on other sites More sharing options...
NotSoWise Posted January 21, 2020 Share Posted January 21, 2020 I tried to be sarcastic, but I failed. re skin in the game - I disagree - its just options without downside (big package, but still no downside). On top he is already a wealthy person with nice salary check (his most recent advice was "patience"). If all / most of his wealth were in Global, then he would have skin in the game and then he would probably not manage it from Colorado. I am highly skeptical about managing such large business from another continent. With the weak 3Q, recent changes in UK management and possibly poor 4Q - it looks more and more like a restructuring. Link to comment Share on other sites More sharing options...
Munger_Disciple Posted January 21, 2020 Share Posted January 21, 2020 The most important part of restructuring that is sorely needed is getting rid of Mike Fries. Link to comment Share on other sites More sharing options...
NotSoWise Posted January 21, 2020 Share Posted January 21, 2020 I think John keeps him for M&A work (probably more assets sale to come e.g. Poland). He is a decent deal maker, but terrible operator - like most former I-Bankers... Link to comment Share on other sites More sharing options...
Munger_Disciple Posted January 21, 2020 Share Posted January 21, 2020 I think John keeps him for M&A work (probably more assets sale to come e.g. Poland). He is a decent deal maker, but terrible operator - like most former I-Bankers... You could be right. But firing Fries and hiring an I-Banker might be cheaper given how much damage Fries already caused. Malone himself is paying dearly for this mistake... Link to comment Share on other sites More sharing options...
scorpioncapital Posted January 22, 2020 Share Posted January 22, 2020 Pretty good presentation on the tech https://drive.google.com/open?id=1ILPWLpi_5X5mVaRKSdo88MVpE-ED0lO7 Btw if fries is fired how much does he get as a golden parachute? Link to comment Share on other sites More sharing options...
NotSoWise Posted January 22, 2020 Share Posted January 22, 2020 Do you guys still have Global in your portfolio - or have you recently sold out? I unfortunately still have it (4 years by now) - it was a mistake not to sell this dog 3 years ago in retrospect. What I am afraid is that the cash they have is "virtual" - in a sense that if EBITDA goes down, then they will have to repay debt - in which case we will have less EBITDA and no cash... 4Q numbers should give us answer to this question (current price already pointing towards this scenario). Link to comment Share on other sites More sharing options...
rogermunibond Posted January 22, 2020 Share Posted January 22, 2020 Sold LBTYA and LILA - Malone's red headed step children LSXMA, FWONA, and BATRA otoh Link to comment Share on other sites More sharing options...
NotSoWise Posted January 22, 2020 Share Posted January 22, 2020 LILAK may still turn out ok (times money wise, not IRR). Recent acquisition from AT&T seems good, Telefonica will divest stuff in the region, potential merger with TIGO, growing scale, large insiders' purchases in the past 9 months etc. With LBTYK its not so obvious how it will end. Link to comment Share on other sites More sharing options...
scorpioncapital Posted January 22, 2020 Share Posted January 22, 2020 Do you think the stock price is reflecting a poor q4 report ? Just curious. How does the market know beforehand? Was the information illegally disclosed or it's some voodoo of market dynamics that they know in advance what is likely to happen? Link to comment Share on other sites More sharing options...
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