undervalued Posted January 22, 2020 Share Posted January 22, 2020 Bidding for Univision https://finance.yahoo.com/news/liberty-global-working-hemisphere-media-192313711.html Link to comment Share on other sites More sharing options...
NotSoWise Posted January 22, 2020 Share Posted January 22, 2020 I think good/bad numbers sometimes leak before - not exact numbers, but more like direction of numbers. This happens via company giving some small hints to analysts before publication or via people - e.g. someone may know somebody from e.g. sales/ accounting/ marketing etc and may get some general info like "difficult quarter" or "headwinds" or "some bank pressure" etc. It may not always impact price due to small volume or people "in the know" not changing positions despite good/ bad quarter. Dont think its reliable enough to systematically make money on this, either. Unfortunately I never know to what extent the information is in the price - dont think anybody knows. Link to comment Share on other sites More sharing options...
scorpioncapital Posted January 23, 2020 Share Posted January 23, 2020 In q3 they guided to 700m of fcf. But I guess the market will scrutinize the revenue drop. Still If they can keep up 700m a quarter that's 2.8 billion fcf a year. I looked at a company about half the size , Shaw communications in Canada and seems very similar asset . That trades at 10b vs global less than 12 billion and is 2 to 3x more cash flow. However global is more leveraged which is a risk. Also I think in UK there is no division of territory like north or south. This may actually make it more competitive and perhaps less profitable Link to comment Share on other sites More sharing options...
ander Posted January 23, 2020 Share Posted January 23, 2020 https://www.cnbc.com/2020/01/23/the-telecom-stock-berkshire-owns-boasts-killer-app.html Link to comment Share on other sites More sharing options...
dwy000 Posted January 23, 2020 Share Posted January 23, 2020 https://www.cnbc.com/2020/01/23/the-telecom-stock-berkshire-owns-boasts-killer-app.html Somebody needs to tell Mike Fries that broadband is not an app it's the infrastructure over which apps ride. Should I be worried that he doesn't know the difference? Link to comment Share on other sites More sharing options...
Jurgis Posted January 23, 2020 Share Posted January 23, 2020 https://www.cnbc.com/2020/01/23/the-telecom-stock-berkshire-owns-boasts-killer-app.html Somebody needs to tell Mike Fries that broadband is not an app it's the infrastructure over which apps ride. Should I be worried that he doesn't know the difference? How do you get broadband? You use broadband app. How do you get broadband app? You use broadband. How do you get broadband? You use broadband app. Link to comment Share on other sites More sharing options...
forest81 Posted January 24, 2020 Share Posted January 24, 2020 For those who think there is no value here. They have 7.5b cash in hand. Value of company approx 12.5b. If they bought shares back to the tune of 7.5b, this would not change operations at all. You would still be earning 700m to 1bn free cashflow per year so approx 5 to 6 times free cashflow. You would still have 2.5b headroom on debt and other operations around Europe also the tax assets. Bonus of a possible takeover from Vodafone/ Comcast. I know the buybacks will not happen like that but I think it highlights the undervaluation well. Link to comment Share on other sites More sharing options...
NotSoWise Posted January 24, 2020 Share Posted January 24, 2020 Value is there, but then Mike is there as well.... I think both cancel out each other. It has been in a decline since 5 last years, so unless they start selling out pieces and doing buybacks, there will be no catalyst to create this value. Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted January 24, 2020 Share Posted January 24, 2020 Back of the envelope type calculation using 2018's OCF #s. All figures in USD Current Liberty Global EV: $32.4 billion Value of Telenet stake @ Telenet's current market price of 41 Euro: $3 billion Telent's net debt that is consolidated on Liberty's balance sheet: $6.37 billion Minority Investments: $1 billion (rounded down from $1.4 or $1.45) Loan to Vodafone Ziggo JV: $0.87 billion Adj EV: $21.2 billion 2018 OCF Virgin Media: $3.1 billion Poland & Slovakia: $0.2 billion 50% share of Vodafone Ziggo JV: $1 billion UPC Switzerland: $0.6 billion Corporate overhead: -$1 billion Total OFC: $3.9 billion Adj EV / 2018 OCF = ~5.44x Someone tell me why this is the wrong way to think about the situation, is stupid, etc Link to comment Share on other sites More sharing options...
maybe4less Posted January 24, 2020 Share Posted January 24, 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? Yes, I think this is right. Apparently they go around and essentially preview earnings to large shareholders and to analysts ahead of time. I've also heard that the Liberty Media guys will make their own comments to people about Global ahead of earnings (which seems totally bizarre IMO). Seems like it skirts the border of being illegal. I've spoken with IR about this before and they put it as they are "reminding" people about certain already disclosed things. Obviously, what they choose to emphasize gets the message across. Link to comment Share on other sites More sharing options...
scorpioncapital Posted January 24, 2020 Share Posted January 24, 2020 Seems not borderline illegal but hardcore illegal. But many companies to blame. On the other hand it is an equal speculation to have what you think is amazing info and maybe it's useless. From q3 I see they guided revenue down , fcf 700m+. Unless something is dramatically different and I've seen companies declare new guidance ahead of earnings publicly, I'm expecting this. Maybe the magnitude is the question. Link to comment Share on other sites More sharing options...
Munger_Disciple Posted January 24, 2020 Share Posted January 24, 2020 Value is there, but then Mike is there as well.... I think both cancel out each other. It has been in a decline since 5 last years, so unless they start selling out pieces and doing buybacks, there will be no catalyst to create this value. +1 The "value" seems to be disintegrating by the month. Fries said there is a lot of "optionality" in Liberty Global even though Virgin Media is facing a lot of competition in his CNBC interview a few days back. I interpreted it as: UK business sucks & I am just praying to God that someone like Vodaphone or Comcast takes it off our hands at a big multiple. Then I don't have to put up with all the travel to London from Colorado in my private jet. Plus he keeps saying stuff like "Broadband is the killer app" on TV as others pointed out. I would get more excited about Liberty Global if Fries becomes part of the "restructuring". Link to comment Share on other sites More sharing options...
Spekulatius Posted January 24, 2020 Share Posted January 24, 2020 Value is there, but then Mike is there as well.... I think both cancel out each other. It has been in a decline since 5 last years, so unless they start selling out pieces and doing buybacks, there will be no catalyst to create this value. I agree that Fries should go. I have followed LBTYA forever , but haven’t bought until very recently. This business needs some solid execution and even slow growth in top and bottomline on a somewhat consistent basis makes this a $30 stock, imo. Fries has never presented a plan and executed to it during the 5+ years I followed this. It’s a neverending game of moving yardsticks. Link to comment Share on other sites More sharing options...
kab60 Posted January 24, 2020 Share Posted January 24, 2020 I believe Berenberg is the most bearish on the stock. If anyone wants some headlines from their recent report hit me up. I don't have a position nor any view on the stock. Link to comment Share on other sites More sharing options...
scorpioncapital Posted January 24, 2020 Share Posted January 24, 2020 I think BofA came out today with a target of 25 to 35. Link to comment Share on other sites More sharing options...
skanjete Posted January 26, 2020 Share Posted January 26, 2020 Value is there, but then Mike is there as well.... I think both cancel out each other. It has been in a decline since 5 last years, so unless they start selling out pieces and doing buybacks, there will be no catalyst to create this value. Isn't this exactly what they have been doing over the last 2 years? Link to comment Share on other sites More sharing options...
NotSoWise Posted January 26, 2020 Share Posted January 26, 2020 To extract full value, they would have to sell out everything and return all the money. Its not Mike's preferred scenario as he would have to cut off the branch he is sitting on comfortably. For the time being buybacks are put on hold due to potential (?) CF/ covenants issues (despite attractive stock price) and Swiss business hasn’t sold. Was it possible to do more exits in this time frame? - hard to say - things take time, you need to prepare businesses for sale, then you have to digest internally the spinoff (central functions, etc). So, yes, they moved in the right direction, but it was not enough to move the price. On top they fu.... up in UK. Link to comment Share on other sites More sharing options...
skanjete Posted January 27, 2020 Share Posted January 27, 2020 To extract full value, they would have to sell out everything and return all the money. Its not Mike's preferred scenario as he would have to cut off the branch he is sitting on comfortably. For the time being buybacks are put on hold due to potential (?) CF/ covenants issues (despite attractive stock price) and Swiss business hasn’t sold. Was it possible to do more exits in this time frame? - hard to say - things take time, you need to prepare businesses for sale, then you have to digest internally the spinoff (central functions, etc). So, yes, they moved in the right direction, but it was not enough to move the price. On top they fu.... up in UK. UK is indeed less than ideal, but the market overly concentrates on this issue. There is more than the UK in Liberty Global, and it can be argued that at the current share price, you get Virgin for free. So what is the UK risk actually? If you don't pay for it, there's no risk. And so the UK situation converts in an opportunity instead of a risk if they ever can stabilise it... About Fries : there's a lot to be said about him, but if you consider the metrics per share (including splitoff LILA), his track record over the last decade is not so bad as the share price suggests. The low share price is principally a result from multiple contraction instead of worse results. Link to comment Share on other sites More sharing options...
NotSoWise Posted January 27, 2020 Share Posted January 27, 2020 And why do you think the multiple went down? CHTR multiple is doing fine... Link to comment Share on other sites More sharing options...
Mungerish Posted February 3, 2020 Share Posted February 3, 2020 Thought this would be of interest here given the discussion around Charter vs. the rest https://www.cnbc.com/video/2020/01/30/att-regulation-media-earnings-squawk-box-panel.html If the road to Charterization within UK and Euroland became clear and visible, LBTYA would be a unique opportunity provided they had the right guy to execute it. Fries may not have many Rutledge-like characteristics. Link to comment Share on other sites More sharing options...
Liberty Posted February 4, 2020 Author Share Posted February 4, 2020 And why do you think the multiple went down? CHTR multiple is doing fine... CHTR and LBTYA shouldn't be compared too much. The industry dynamic is different in Europe. And CHTR management is better. Link to comment Share on other sites More sharing options...
scorpioncapital Posted February 4, 2020 Share Posted February 4, 2020 Agree. Lbtya will never be as good an investment as chtr. A better comparison might be Shaw or Rogers in Canada. I do not like the regulatory environment for broadband outside the USA. In fact it seems even worse than a commodity business. At least a commodity business is free, even if limited, while foreign telecom is worse than a commodity. It's a commodity considered almost an arm of the government social services. I know comparing broadband to say steel is crazy, but is it getting better or getting worse ? I don't see much improvement in any country I look. We shall see... Link to comment Share on other sites More sharing options...
NotSoWise Posted February 4, 2020 Share Posted February 4, 2020 This was my point, multiple went down as regulations got tougher in EU plus Mike's performance was getting worse each year. Quite opposite to his skiing skills which must have improved a lot in Colorado. Link to comment Share on other sites More sharing options...
rogermunibond Posted February 4, 2020 Share Posted February 4, 2020 LBTYA mgmt (Fries) and even Malone made the argument that European cable dynamics were better on the payTV side. Less cost for content, less cordcutting, benefits from triple or quad play. Also more opportunities for consolidation despite the regulatory environment. The thesis has been largely proven false. Which is why LBTYA is in the position it's in. Link to comment Share on other sites More sharing options...
scorpioncapital Posted February 4, 2020 Share Posted February 4, 2020 Cordcutting is pretty global..I remember a guy in krakow was even watching TV streaming off his 4g connection. Not even broadband. Link to comment Share on other sites More sharing options...
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