LSXMK - Liberty SiriusXM

[ValueMaven]

Keeping this extremely high-level.  It seems to me that LSXMK is trading at an usually wide-discount to NAV, despite several possible catalysts over the coming quarters.  Discount to NAV currently stands at ~35% to NAV.  You have small stakes in the Braves, Formula One, iHeart, and a sizable position in Live Nation.  The jewel however is the tracking unit of Sirius which has gone from 45% of O/S from GFC in 2009 to ~77% today.  You have Sirius actively buying back stock, as well as Liberty buying back the tracker at a deep discount.  Liberty which owns ~77% of Sirius will likely acquire ~80% of the company through natural buybacks over the next several quarters.  In fact earlier this year, both companies filed with the SEC to potentially have a consolidated tax forum.  Basically over the coming quarters it is likely that Liberty will acquire all of Sirius and this arb to NAV will collapse.  There are many theories and possible outcomes, but I'll save this for the Q&A below.  Apologies as I know a lot has been written about Liberty series before - but I didnt find a separate thread on the Sirius tracker. 

 

Here is Maffefi talking about buying back the discount at deep discount

 

 

[vince]

Excellent post, I absolutely love this investment, 25% of my net worth in it. At 80% Liberty will get access to Siri cash flows (which should happen no later than 4th quarter), and either the discount narrows significantly or heavy Lsxma buybacks.  This is free money assuming Siri's business remains solid and it certainly looks like that will be the case imo.  And there's more.....I find it very interesting to think about Liberty's position in music with Ticketmaster, Live Nation, Pandora, Siri, and iHeart especially in the hands of Malone and Maffei.  For whatever reason the market is not even excited by the discount (Malone could close the discount tomorrow if he wanted to and has executed almost the exact same thing before), let alone the potential opportunities.  I pray the discount holds as they allocate Siri's cash flows to Lsxma buybacks.

[ValueMaven]

Agreed.  Seems like we are very close to an inflection point here actually.