Yours Truly Posted February 24, 2014 Share Posted February 24, 2014 SAC Capital also bought STRZA. You know what that means. ;) They were a large holder in STRZA at the time of its spin-off back in January 2013... If I recall, it was close to 3-5% of shares o/s Link to comment Share on other sites More sharing options...
Yours Truly Posted February 24, 2014 Share Posted February 24, 2014 Anybody looking at Starz? Looks like WEB bought both LMCA and STRZA this quarter. Pretty sure that was a Ted Weschler pick (or maybe Combs, but not WEB). LMCA is definitely Ted's pick. If I recall, it was his third largest holding at his hedge fund and was previously his third largest at BRK behind (DTV and DVA). Ted personally owns $40 mil of LMCA shares and $9 mil worth of Starz. Starz was spun off of LMCA in Jan 2013 and has appreciated 100%+ since. I'm in the opinion that you can't go wrong with anything that is spun-off from any of the Liberty companies and they generally produce market beating returns. I.E.LVNTA, DTV, DISC.A, Starz, etc. Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted February 24, 2014 Author Share Posted February 24, 2014 Liberty Digital was a dud. Ascent was ok. I can't remember what happened with Liberty Livewire. http://glennchan.files.wordpress.com/2013/04/liberty-history-diagram-05-small.gif Link to comment Share on other sites More sharing options...
Yours Truly Posted February 24, 2014 Share Posted February 24, 2014 Beautiful graph. I guess it'll need revisions with the upcoming trackers for QVC and Liberty Digital Commerce as well as the full spin-off of Liberty TripAdvisor plus the C-class of LMC. Link to comment Share on other sites More sharing options...
ni-co Posted February 25, 2014 Share Posted February 25, 2014 http://gigaom.com/2014/02/24/marc-andreessen-says-more-net-neutrality-laws-are-not-the-answer/ Reminds me of Malone who said something along the lines: In the long run, there has to be a link between bandwidth usage and cost. It's simply an economic necessity. The current model hugely favors huge bandwidth users (consumers as well as companies). The political question can only be where in the value chain you want to charge for this usage. Does it really matter, whether in the end NFLX pays the bill or the NFLX customer? Link to comment Share on other sites More sharing options...
Liberty Posted February 25, 2014 Share Posted February 25, 2014 Live Nation reports Q4: http://investors.livenationentertainment.com/files/doc_news/2014/Q4-FY%202013EarningsRelease_FINAL.pdf Concert Attendance Up 19% - Total Ticketmaster 400 Million Fans Delivering Over $17 Billion GTV 900 Million Fans Visit Ticketmaster, Creating User Database of 250 Million Fan Preferences Revenue Up 11% to $6.5 Billion AOI Increased 10% to $505 Million Moved to Profitability in Operating Income of $140 Million Adjusted Net Income Up $157 Million to ($7 Million) Reported Net Income Improved by $120 Million Free Cash Flow Up 9% to $300 Million Full Year Adjusted EPS Up $0.84 to ($0.04); Reported EPS Up $0.65 Up about 12%. Link to comment Share on other sites More sharing options...
RichardGibbons Posted February 26, 2014 Share Posted February 26, 2014 Does it really matter, whether in the end NFLX pays the bill or the NFLX customer? Yes. If you greatly increase the difficulty for people to create competing services, there will be fewer competing services. Less innovation is bad for anyone who isn't already already an online winner. Link to comment Share on other sites More sharing options...
ni-co Posted February 26, 2014 Share Posted February 26, 2014 Does it really matter, whether in the end NFLX pays the bill or the NFLX customer? Yes. If you greatly increase the difficulty for people to create competing services, there will be fewer competing services. Less innovation is bad for anyone who isn't already already an online winner. How exactly does charging for bandwidth usage give incumbents an unfair advantage? Your bandwidth cost increases with your size. Nobody has any problem with charging NFLX per envelope sent for their DVD business. Nobody argues that the postal service should eat this cost and deliver mail for free to "support innovation". This innovation argument is not only irrational, it diverts the attention from the important questions: providing equal access and cost of usage. In this whole net neutrality debate, people mix these two questions. I don't argue with the necessity of regulating equal access. In my opinion, this is necessary because the internet infrastructure is a natural monopoly (or oligopoly). However, this debate quickly becomes irrational when it comes to paying for bandwidth usage and I think this is where Andreessen and Malone are right. There is no infinite supply in bandwidth. And if bandwidth is or becomes a scarce commodity then there has to be a pricing mechanism that links bandwidth usage to cost. That's how markets work (the only alternative would be state ownership of the internet infrastructure). Link to comment Share on other sites More sharing options...
Sportgamma Posted February 26, 2014 Share Posted February 26, 2014 http://www.dtc.umn.edu/~odlyzko/doc/net.neutrality.delusions.pdf http://www.dtc.umn.edu/~odlyzko/doc/smart.pricing.pdf Link to comment Share on other sites More sharing options...
Liberty Posted February 26, 2014 Share Posted February 26, 2014 How exactly does charging for bandwidth usage give incumbents an unfair advantage? Your bandwidth cost increases with your size. Nobody has any problem with charging NFLX per envelope sent for their DVD business. Netflix was already paying for its bandwidth, though. Now it's paying twice on its side when it comes to Comcast and the customer on the other end is paying once against for their data plan. Link to comment Share on other sites More sharing options...
Guest wellmont Posted February 26, 2014 Share Posted February 26, 2014 How exactly does charging for bandwidth usage give incumbents an unfair advantage? Your bandwidth cost increases with your size. Nobody has any problem with charging NFLX per envelope sent for their DVD business. Netflix was already paying for its bandwidth, though. Now it's paying twice on its side when it comes to Comcast and the customer on the other end is paying once against for their data plan. my understanding is nflx shifted payments from ccoi to comcast. makes sense if you look at market reaction. nflx didn't go down on this announcement (actually went up) and ccoi did (a lot). dan rayburn has a good explanation of what happened here. Link to comment Share on other sites More sharing options...
ni-co Posted February 26, 2014 Share Posted February 26, 2014 my understanding is nflx shifted payments from ccoi to comcast. makes sense if you look at market reaction. nflx didn't go down on this announcement (actually went up) and ccoi did (a lot). dan rayburn has a good explanation of what happened here. That's my understanding, too. … when it comes to Comcast and the customer on the other end is paying once against for their data plan. Not every Comcast customer is a Netflix customer, though. What speaks against charging Netflix for its usage so that they, in turn, charge their customers a higher rate? Maybe that's how it works already, but I doubt that. Anyway, the problem is that it's not transparent at all. You don't know how much NFLX is paying and by how much other broadband customers with lesser bandwidth needs subsidize Netflix customers. In my mind, there is no doubt that you have to regulate access to broadband, at the very least, pricing must be transparent. Link to comment Share on other sites More sharing options...
RichardGibbons Posted February 27, 2014 Share Posted February 27, 2014 How exactly does charging for bandwidth usage give incumbents an unfair advantage? Your bandwidth cost increases with your size. Nobody has any problem with charging NFLX per envelope sent for their DVD business. Nobody argues that the postal service should eat this cost and deliver mail for free to "support innovation". This innovation argument is not only irrational, it diverts the attention from the important questions: providing equal access and cost of usage. Suppose that I want to create a YouTube competitor. Paying for bandwidth, it would cost me $100 million in each of the first 5 years to build it. After that, it would be profitable. I don't have $500 million, so I can't create that business. Suppose Apple wants to create a YouTube competitor. Apple has roughly $69 quadrillion on its balance sheet, so it can find the $500 million in its couch cushions. The reason that people don't argue that the postal service should be free to support innovation is the same reason that nobody's arguing that the Internet should be free. The argument is about whether it should be paid for in a way that encourages monopolies and discourages innovation, or in a way that encourages competition and innovation. Incumbents should generally prefer the former, while society and entrepreneurs should generally prefer the latter. Link to comment Share on other sites More sharing options...
ni-co Posted February 27, 2014 Share Posted February 27, 2014 Suppose that I want to create a YouTube competitor. Paying for bandwidth, it would cost me $100 million in each of the first 5 years to build it. After that, it would be profitable. I don't have $500 million, so I can't create that business. Suppose Apple wants to create a YouTube competitor. Apple has roughly $69 quadrillion on its balance sheet, so it can find the $500 million in its couch cushions. The reason that people don't argue that the postal service should be free to support innovation is the same reason that nobody's arguing that the Internet should be free. The argument is about whether it should be paid for in a way that encourages monopolies and discourages innovation, or in a way that encourages competition and innovation. Incumbents should generally prefer the former, while society and entrepreneurs should generally prefer the latter. That's all fine, as long as you're aware of the fact that you endorse a subsidy for bandwidth intensive businesses. Ben Thompson – as always – nails it: While I love the idea of unlimited data, I also am aware that nothing comes for free; in the case of unlimited data, the cost we are paying is underinvestment and/or discriminatory treatment of data. Therefore I believe the best approach to broadband is usage-based payment by both upstream and downstream, with no payments in the middle. The way this would have played out in the case of Netflix is that: Netflix would pay more at the point of origin to compensate backbone providers for the massive amount of data they generate ISP customers who watch the most video would pay more It’s the latter result that terrifies Netflix, and is why, in the end, they are not an ally of those of us who desire true net neutrality. Currently non-Netflix broadband subscribers are effectively subsidizing Netflix viewers; they use much less capacity, yet pay the same price. This needs to change for the sake of true net neutrality, and if it results in Netflix losing subscribers, so be it. http://stratechery.com/2014/netflix-net-neutrality/ Much more eloquently expressed than what I said, but this is exactly what I tried to say. The thing I try to figure out is: Is this good for the cable companies after all? Link to comment Share on other sites More sharing options...
RichardGibbons Posted February 28, 2014 Share Posted February 28, 2014 That's all fine, as long as you're aware of the fact that you endorse a subsidy for bandwidth intensive businesses. I do. In almost every aspect of life and business there are accidental and deliberate subsidies. This one is hugely beneficial for society, so I endorse it strongly. Link to comment Share on other sites More sharing options...
Liberty Posted February 28, 2014 Share Posted February 28, 2014 Q4: http://files.shareholder.com/downloads/ABEA-4CW8ZW/2990427397x0x729869/6cb98dae-5dac-48f8-a73a-cbb98d4f3424/LMCA_News_2014_2_28_General_Releases.pdf SiriusXM reported strong Q4 results ❍ Subscriber base grew to 25.6 million ❍ Revenue of $1 billion, up 12% from the fourth quarter of 2012 ❍ Adjusted EBITDA(2) grew 41% to $326 million ❍ Net income of $65 million ❍ Repurchased $1.8 billion in shares in 2013, including shares from Liberty Media ❍ Affirmed 2014 guidance: revenue of over $4 billion, Adjusted EBITDA of approximately $1.38 billion, net subscriber additions of approximately 1.25 million and free cash flow(2) approaching $1.1 billion ● Completed sale of first tranche of Liberty Media owned SIRI shares to SiriusXM in November 2013 for a total of $160 million ● Announced proposal to acquire the remaining equity of SiriusXM not owned by Liberty Media ● Live Nation reported record performance in 2013 with revenue up 11% to $6.5 billion and profitability in operating income of $140 million ● Repurchased 5.8% of LMCA outstanding shares in 2013 Link to comment Share on other sites More sharing options...
Liberty Posted March 1, 2014 Share Posted March 1, 2014 http://www.bloomberg.com/video/comcast-said-to-weigh-subscriber-spinoff-C4ZWR5TfTROqvLMo9FSFcg.html Link to comment Share on other sites More sharing options...
ni-co Posted March 1, 2014 Share Posted March 1, 2014 http://www.bloomberg.com/video/comcast-said-to-weigh-subscriber-spinoff-C4ZWR5TfTROqvLMo9FSFcg.html Might be a Roberts move to set Charter/Malone under pressure in their negotiations. A spin-off doesn't make any sense. Link to comment Share on other sites More sharing options...
spark411 Posted March 7, 2014 Share Posted March 7, 2014 I own the stock LBTYA. Recently the stock split to 50% LBTYA and 50% LBTYK. Can anyone help me understand why this occurred? Is this good or bad? Link to comment Share on other sites More sharing options...
jay21 Posted March 7, 2014 Share Posted March 7, 2014 good note by NAS Thanks. If the discount is this wide, this seems like a no-brainer given it maybe should trade at a premium given the value creation and financial engineering. Also, the discount makes repurchases highly accretive. Just curious to see how big (as a % of your portfolio) LMCA is for other people's portfolios if you don't mind sharing? Right now, this is ~7% for me and I'm thinking about taking it up to 10 - 15% Link to comment Share on other sites More sharing options...
AtlCDore Posted March 7, 2014 Share Posted March 7, 2014 Spark, Each holder of LBTYA, LBTYB and LBTYK (class C shares) was given 1 share of LBTYK for each share they own. The A shares have 1 vote per share, the B shares (mostly owned by Malone) have 10 votes per share and the K shares have no voting rights. With Liberty Global in acquisition mode my guess is that they wanted to create a "currency" to use for acquisitions. This way they don't dilute the voting rights of the current holders of A and B shares. LMCA has also talked about creating a class C shares for using in the event they were to buy out the remaining shares of SIRI. Malone is a brilliant guy who always seems to be thinking 3 steps ahead of everyone else. Mike Fries who runs Liberty Global is a great manager. I own the stock and probably not a seller anytime soon. Link to comment Share on other sites More sharing options...
AtlCDore Posted March 7, 2014 Share Posted March 7, 2014 Jay, I would agree with you about the stock trading at a discount. I am thinking about buying more for myself. LMCA has been a big buyer of their own stock over the years (since 2009) but hasn't purchased anything recently (last 2 months). Maffei said on the call that they didn't purchase any stock. My guess is that they want to keep their powder dry for possible purchases of SIRI, TWC, other assets. About 10% of my portfolio. Best--AtlCDore Link to comment Share on other sites More sharing options...
Yours Truly Posted March 7, 2014 Share Posted March 7, 2014 It's 10% for me, and LINTA is 20% Link to comment Share on other sites More sharing options...
thefatbaboon Posted March 11, 2014 Share Posted March 11, 2014 Had a couple questions: Obviously discount is quite wide to the underlying assets. But assuming i'm not shorting Sirius, Charter and LiveNation against a Liberty long what do you guys really think about valuation here? Buying LMCA is essentially buying these three companies at a 25% discount to their current market prices. I've had a quick look at Sirius which is about 50% of LMCA's assets and it seems fairly rich. A $22bn market cap against a projected $1.1bn of FCF in 2014. Even if I take their leverage up to 4x, convert their $500m of bonds and spend their 2014 FCF all on share repo I only get the net market cap down to $18.5bn. I guess if we're buying through Liberty at the current discount we're getting long Sirius' 2014 $1.1bn FCF stream at around $14bn ($18.5bn * the 25% Liberty discount) (i.e. 8% fcf yield). But that's now leveraged at 4x - no much juice left there - so we're going to be dependent on FCF growth coming at high single digits to safely get a good return. You guys comfortable with the Sirius business model looking out a few years, getting good growth etc? Charter and Livenation also seem pretty rich but I haven't looked at them as closely yet. I've long been an idiot without a position in Malone's companies and I'm kind of sick of it. Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted March 11, 2014 Author Share Posted March 11, 2014 I think that Sirius XM is a wonderful business with a very strong moat. Suppose you are a content creators like Howard Stern. Where do you want to broadcast? a- You can go with Clear Channel, which is advertising supported and reach a nation-wide audience. b- You can go with Sirius, which is subscription based and reach a nation-wide audience. c- You can go with some form of Internet radio and make no money. So this is not really an option and likely never will be. d- Other. Stern is a host on America's Got Talent. Basically... I think the only options are Sirius or Clear Channel. So there is some pricing power there due to the duopoly. Sirius only has to pay Stern a little more than Clear Channel. Sirius has a growing subscriber base so it will generate economies of scale and be a little more appealing to content creators. The creators like to get paid more and like to reach a wider audience which will increase their revenues in other areas. 2- It is unlikely that somebody will build a competing satellite radio service. It is unlikely that somebody will build another Clear Channel (???). Satellite radio doesn't compete in talk. So Sirius XM has surprisingly little competition. The company will likely continue to compound its earnings without much threat from competitors. 3- You might see international expansion. And possibly some upside from the connected car. Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now