MSGN - MSG Networks

[dwy000]

I sold it all on Wednesday. I was getting concerned since it wasn't able to move above $17.25 or below highest bid price of $17.50 in the auction.

 

At $17.50, they would be buying back 23.3% of all outstanding class A shares which is an enormous percentage. So the market seemed to say that there was enough supply to get $250 million worth of stock and possibly at a lower price than $17.50.

 

The stock is cheap but, if there is this kind of dumping or supply then I was concerned that it would go down by quite a bit following the auction. Maybe I was also influenced by another Dutch auction that I was involved in earlier this summer and where the stock retreated by around 15% following the auction.

 

Carboard - isn't that the mantra of value investors?  Use the price swings that come about due to issues that have little to do with intrinsic value?  Or are you just looking for a lower (re)entry point?

[Cardboard]

Call it trader instinct if you want but, it smells to me.

 

We will see the auction results, stock price action and then I will reassess.

[Gregmal]

Call it trader instinct if you want but, it smells to me.

 

We will see the auction results, stock price action and then I will reassess.

 

Bingo. I thought too that $17.xx's started seeing more resistance so lightened up a bit. I still have the position as core, and overweight, but there's nothing wrong with keeping yourself flexible. If it rockets up further, I've got no qualms about making that money. If it pulls back, I'm pleased to have made some very quick, easy money on the trade and will happily redeploy with a more favorable value profile.

 

I've said it a million times. I'm just trying to make money. I think $17.50-$18 is still easy money territory but longer term, if there's some pullback or consolidation below that after a run from $13.xx... I'm happy with my money and you can keep the "buy and hold value investor" badge....

[writser]

Results: https://www.sec.gov/Archives/edgar/data/1469372/000119312519258051/d782911dex99a5iv.htm

 

Based on the preliminary count by Equiniti Trust Company, the depositary for the tender offer (the “Depositary”), a total of 14,980,092 shares of MSG Networks’ Class A common stock, par value $0.01 per share (the “Class A Shares”), were properly tendered and not properly withdrawn at or below the purchase price of $16.70 per Class A Share, including 7,515,909 Class A Shares that were tendered by notice of guaranteed delivery.

 

In accordance with the terms and conditions of the tender offer and based on the preliminary count by the Depositary, MSG Networks expects to accept for purchase, at a price of $16.70 per Class A Share, approximately 14,980,092 Class A Shares properly tendered at or below the purchase price and not properly withdrawn before the expiration date, for an aggregate cost of approximately $250,167,536, excluding fees and expenses relating to the tender offer. Included in the 14,980,092 Class A Shares MSG Networks expects to accept for purchase in the tender offer are approximately 10,032 Class A Shares that MSG Networks has elected to purchase pursuant to its right to purchase up to an additional 2% of its outstanding Class A Shares. As MSG Networks expects to accept for purchase all the Class A Shares that were properly tendered and not properly withdrawn at a price at or below $16.70, MSG Networks expects there to be no proration factor. The Class A Shares expected to be purchased represent approximately 24.3 percent of the Class A Shares issued and outstanding as of September 26, 2019. The Company will pay for the Class A Share repurchases with a combination of available cash and borrowings under its existing revolving credit facility.

 

I bought some shares at ~$16.27 average during the drop-off last Friday, minutes before the IB tender instruction deadline, with the intention of tendering and selling the rest. That was probably a break-even very marginal idea but it worked out ok. I might be a fool for earning a few cents when the real opportunity is holding MSGN for the long term but determining long-term value is too hard for me.

[Castanza]

https://www.cnbc.com/video/2019/10/28/media-mogul-streaming-services-will-become-large-buyers-of-our-content.html

 

Ted Leonsis Interview on the future of streaming.

[Gregmal]

https://seekingalpha.com/pr/17690858-msg-networks-inc-reports-fiscal-2020-first-quarter-results

 

Result out. Do not look to reflect tender offer activity, but nonetheless, nothing special. That said, I dont need them to be anything special here.

[Gregmal]

Basically what you'd expect, hardly anything beautiful, but good enough. Key piece here was confirmation of multi year renewals with Altice. Keep the cash flowing.

 

https://seekingalpha.com/article/4321274-msg-networks-msgn-ceo-andrea-greenberg-on-q2-2020-results-earnings-call-transcript

[Gregmal]

https://nypost.com/2020/02/19/unrelenting-steve-cohen-lingers-over-mets-sale-wants-sny/

 

Cohen apparently wants SNY as part of the Mets deal. Market value is said to be $850-$1B with gross profit of $150M. MSGN owns the rights to multiple teams in multiple sports and regularly does $400M in gross profit. Another checker indicating the market is still there for these assets and that 1) YES is a good comp, and 2) this is really just a trade on Dolan not being a putz and losing $2.5-$3B in value.

[KJP]

8% subscriber decline:

 

Summary of Reported Results from Operations

Fiscal 2020 third quarter total revenues of $185.0 million decreased 5%, or $10.1 million, as compared with the prior year period.  Affiliation fee revenue decreased $6.6 million, primarily due to the impact of a decrease in subscribers of approximately 8%, partially offset by the impact of higher affiliation rates.

 

https://seekingalpha.com/pr/17855950-msg-networks-inc-reports-fiscal-2020-third-quarter-results

 

This may accelerate next quarter as even sports fans question what they're paying cable bundle prices for. 

[fareastwarriors]

MSG Networks Considering Rejoining With MSG Entertainment

 

 

Potential deal would recombine Dolan family businesses

News sends shares of MSG Networks surging on Wednesday

 

https://www.bloomberg.com/news/articles/2021-03-10/msg-networks-is-said-to-weigh-tie-up-with-msg-entertainment

[Gregmal]

Not totally unexpected. Makes sense too. I sold out of this around $18 about a month ago when all the pros(hopefully not any of Read The Audiobooks friends!) where getting margin calls on all the squeeze stuff. Interestingly many of the Liberty entities as well as the other MSG entities where getting blasted(basically all the classic "value" stuff that everyone who runs a NYC based shop is long); figured the only upside left here at $18 was predicated on a sale, whereas buying another big slug of MSGE in the mid-high $80's was a gimme. So thats what I did. Will be interesting to see if anything materializes and how it shakes out.

[txvalue]

I loved the Boyar Group response to this deal and hope that some of the larger holders like Ariel and Gabelli are pushing back.

 

It could be as simple as MSGE wanting cash to help better fund things, but they have to realize that the move is being done at the expense of both MSGN and MSGS holders. MSGS would be much more valuable if this was rolled back into the fold. Dolan gets hate but he is smart, I would love to know what the real strategy is behind this.

 

I have a reasonably low cost basis so I'm holding and I've voted against the deal. Like Greg mentioned it's certainly an interesting situation but the size of the deal and float might make it more difficult for someone to come in and really make some noise.