loganc Posted April 25, 2014 Share Posted April 25, 2014 the mainstream media has no idea that comcast and charter are carving up the cable industry into a duopoly. they will realize this (too late) once COX merges with charter. (after chtr secures the comcast/twc customers). With all due respect, what makes you think that COX wants to sell? Based on all that I have read, it seems like the Cox family is pretty happy holding the cable assets. Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted April 26, 2014 Author Share Posted April 26, 2014 Hmm something occurred to me. A long time ago, John Malone figured out that having your shares trade at depressed valuations for long periods of time is better than having them trading at premium valuations for long periods of time. If your stock always trades at a premium, then you would want to use stock as currency to buy other assets. (Or you have secondary offerings and use the cash raised to buy assets.) So you would be constantly rolling up other assets. Eventually, you will get really really big and size will be an anchor on performance. Then it would likely make sense for Malone to sell his shares and invest it himself so that size is less of a problem. Selling shares would cause Malone to have to pay taxes. If the stock always trades at a discount, Malone can sit there and make free money through buying back shares. Because of the shrinking share count, the company will shrink and avoid the problems of size hurting performance. Share repurchases are also a very tax efficient way of returning excess capital to shareholders. Malone has managed to do something very interesting with Liberty Media. He has been able to continually purchase Liberty Media shares at a discount. He has been able to trick his investors into selling Liberty shares at a low price. Link to comment Share on other sites More sharing options...
Guest wellmont Posted April 26, 2014 Share Posted April 26, 2014 the mainstream media has no idea that comcast and charter are carving up the cable industry into a duopoly. they will realize this (too late) once COX merges with charter. (after chtr secures the comcast/twc customers). With all due respect, what makes you think that COX wants to sell? Based on all that I have read, it seems like the Cox family is pretty happy holding the cable assets. http://www.bloomberg.com/news/2014-02-18/charter-seen-eyeing-cox-after-time-warner-loss-real-m-a.html Link to comment Share on other sites More sharing options...
loganc Posted April 27, 2014 Share Posted April 27, 2014 the mainstream media has no idea that comcast and charter are carving up the cable industry into a duopoly. they will realize this (too late) once COX merges with charter. (after chtr secures the comcast/twc customers). With all due respect, what makes you think that COX wants to sell? Based on all that I have read, it seems like the Cox family is pretty happy holding the cable assets. http://www.bloomberg.com/news/2014-02-18/charter-seen-eyeing-cox-after-time-warner-loss-real-m-a.html Thanks for posting. I still think it is hard to handicap the probability of the Cox family selling, but the article does highlight some other potential targets. Certainly very interesting stuff. Link to comment Share on other sites More sharing options...
jay21 Posted April 28, 2014 Share Posted April 28, 2014 Some news out today on the Comcast situation: "Comcast will divest about 1.4 million existing Time Warner Cable customers directly to Charter for cash. Additionally, Comcast plans to create a new publicly traded company that will serve another 2.5 million existing Comcast customers. Comcast shareholders would own 67% of that new company and Charter would own 33%. The agreement also included a deal to swap 1.6 million Time Warner Cable customers and 1.6 million Charter customers in a like-kind exchange, which the companies said will improve their geographic footprints." http://online.wsj.com/articles/charter-and-comcast-reach-subscriber-deal-1398681105?tesla=y&mg=reno64-wsj&url=http://online.wsj.com/article/SB10001424052702304893404579529262655682706.html Link to comment Share on other sites More sharing options...
Sportgamma Posted April 28, 2014 Share Posted April 28, 2014 Additionally, Comcast plans to create a new publicly traded company that will serve another 2.5 million existing Comcast customers. Comcast shareholders would own 67% of that new company and Charter would own 33% how is it publicly traded if their combined stake is 100%? Link to comment Share on other sites More sharing options...
jay21 Posted April 28, 2014 Share Posted April 28, 2014 Additionally, Comcast plans to create a new publicly traded company that will serve another 2.5 million existing Comcast customers. Comcast shareholders would own 67% of that new company and Charter would own 33% how is it publicly traded if their combined stake is 100%? "Comcast shareholders" not Comcast. I.e. it looks like a spin off where Charter will buy 33%. Link to comment Share on other sites More sharing options...
Sportgamma Posted April 28, 2014 Share Posted April 28, 2014 My bad :-X Link to comment Share on other sites More sharing options...
Liberty Posted April 28, 2014 Share Posted April 28, 2014 Interesting. "Charter Chief Executive Tom Rutledge will be chairman of the new company." I wonder if they have ownership restrictions on the new company... If not, and if the assets are attractive, I don't see why CHTR wouldn't try to buy it all eventually. Also: Liberty Media Corporation ("Liberty") (Nasdaq: LMCA, LMCB) today announced the completion of the final closing under the previously announced share repurchase agreement, dated as of October 9, 2013, between Liberty and Sirius XM Holdings Inc. (NASDAQ: SIRI) ("Sirius"). Pursuant to the agreement, Sirius had agreed to repurchase $500 million of its common stock from Liberty as part of Sirius' share repurchase program. On April 25, 2014, Sirius purchased its final installment of shares, equal to 92,888,561 shares, at a previously established price per share of $3.66, for an aggregate purchase price of $340 million. Link to comment Share on other sites More sharing options...
txlaw Posted April 28, 2014 Share Posted April 28, 2014 Some news out today on the Comcast situation: "Comcast will divest about 1.4 million existing Time Warner Cable customers directly to Charter for cash. Additionally, Comcast plans to create a new publicly traded company that will serve another 2.5 million existing Comcast customers. Comcast shareholders would own 67% of that new company and Charter would own 33%. The agreement also included a deal to swap 1.6 million Time Warner Cable customers and 1.6 million Charter customers in a like-kind exchange, which the companies said will improve their geographic footprints." http://online.wsj.com/articles/charter-and-comcast-reach-subscriber-deal-1398681105?tesla=y&mg=reno64-wsj&url=http://online.wsj.com/article/SB10001424052702304893404579529262655682706.html Interesting. This sort of supports my theory that, eventually, LMCA will mostly just consist of Comcast Corp. Link to comment Share on other sites More sharing options...
Sportgamma Posted April 28, 2014 Share Posted April 28, 2014 Interesting. "Charter Chief Executive Tom Rutledge will be chairman of the new company." I wonder if they have ownership restrictions on the new company... If not, and if the assets are attractive, I don't see why CHTR wouldn't try to buy it all eventually. Also: Liberty Media Corporation ("Liberty") (Nasdaq: LMCA, LMCB) today announced the completion of the final closing under the previously announced share repurchase agreement, dated as of October 9, 2013, between Liberty and Sirius XM Holdings Inc. (NASDAQ: SIRI) ("Sirius"). Pursuant to the agreement, Sirius had agreed to repurchase $500 million of its common stock from Liberty as part of Sirius' share repurchase program. On April 25, 2014, Sirius purchased its final installment of shares, equal to 92,888,561 shares, at a previously established price per share of $3.66, for an aggregate purchase price of $340 million. Lever up and buy back stock...cheaper than paying a takeover premium. Link to comment Share on other sites More sharing options...
Liberty Posted April 28, 2014 Share Posted April 28, 2014 Lever up and buy back stock...cheaper than paying a takeover premium. That's probably the best way to do it (hopefully the spin-off isn't too loaded with debt). They were willing to buy all of TWC in good part because Charter management and strategy/operations are superior. But if they're running the show from the start at the new spin-off, the possibility for synergy isn't there to justify a big takeover premium... Link to comment Share on other sites More sharing options...
craigatk Posted April 28, 2014 Share Posted April 28, 2014 A long time ago, John Malone figured out that having your shares trade at depressed valuations for long periods of time is better than having them trading at premium valuations for long periods of time. Thanks. That is a very interesting to see it spelled out like that. John Malone has proven again that he is usually several steps ahead of everyone else. Studying his plays carefully seems to be something continuously worth doing. Link to comment Share on other sites More sharing options...
Liberty Posted April 29, 2014 Share Posted April 29, 2014 http://www.sec.gov/Archives/edgar/data/1091667/000109166714000090/exhibit992publicpresenta.htm Charter and Comcast's presentation on the deal. Link to comment Share on other sites More sharing options...
jay21 Posted April 29, 2014 Share Posted April 29, 2014 http://www.sec.gov/Archives/edgar/data/1091667/000109166714000090/exhibit992publicpresenta.htm Charter and Comcast's presentation on the deal. And I thought one of the reasons for spin-offs was for simplicity and clarity. This may also give LMCA another vehicle to put its right offering proceeds to use? Link to comment Share on other sites More sharing options...
jay21 Posted April 30, 2014 Share Posted April 30, 2014 http://www.sec.gov/Archives/edgar/data/1091667/000109166714000090/exhibit992publicpresenta.htm Charter and Comcast's presentation on the deal. And I thought one of the reasons for spin-offs was for simplicity and clarity. This may also give LMCA another vehicle to put its right offering proceeds to use? Maybe not: Liberty agreed, subject to certain exceptions, not to transfer its shares of Common Stock during the term of the Voting Agreement. Liberty further agreed that, subject to certain exceptions, neither it nor certain related entities will knowingly acquire ownership of any SpinCo stock until the second anniversary of the Merger. http://www.sec.gov/Archives/edgar/data/1091667/000110465914031556/a14-11366_1sc13da.htm Link to comment Share on other sites More sharing options...
Guest wellmont Posted April 30, 2014 Share Posted April 30, 2014 liberty controls the comcast spin off. it controls the cash flows and capital structure. It makes sense that it will merge with charter down the road. Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted April 30, 2014 Author Share Posted April 30, 2014 It seems like the purpose of the comcast spinoff is so that: A- Comcast/Time Warner won't be too big so hopefully regulators don't step in. B- Charter gets a piece of the action. C- Charter gets to manage the spinoff and collect fees. D- The alternative is for Charter to buy the spunoff company in its entirety. However, that might cause Charter to take on too much leverage??? I'm guessing that Charter will eventually want to merge with the spunoff entity. E- There may be economies of scale. However, I can see how there might be many conflicts of interest between the spunoff entity and Charter. Charter can theoretically do things with the spinoff to benefit Charter. It could use the spinoff to try to force technology vendors to give Charter a better deal. Link to comment Share on other sites More sharing options...
Liberty Posted May 1, 2014 Share Posted May 1, 2014 http://arstechnica.com/information-technology/2014/04/cox-plans-gigabit-internet-for-residential-customers-this-year/ "Cox Communications President Pat Esser said the cable company will roll out gigabit broadband to residential customers this year." Link to comment Share on other sites More sharing options...
txlaw Posted May 1, 2014 Share Posted May 1, 2014 Tom Rutledge praises Comcast/TWC deal: http://www.fiercecable.com/story/charter-ceo-rutledge-endorses-comcast-twc-deal-calls-it-dynamically-positiv/2014-04-30 Link to comment Share on other sites More sharing options...
Liberty Posted May 4, 2014 Share Posted May 4, 2014 Good post by Glenn: http://glennchan.wordpress.com/2014/05/04/lmcalbtya-malones-cable-strategy/ Link to comment Share on other sites More sharing options...
saltybit Posted May 7, 2014 Share Posted May 7, 2014 presentation about Liberty entities from Denali in 11/2013, including nice historical review. http://www.denaliinvestors.com/letters_public/THE%20MALONE%20COMPLEX%20by%20DENALI%20INVESTORS.pdf “For more than 15 years of running TCI, what drove Malone was a determination to create the biggest and most cash-efficient cable operator in the country… Yet, for all this, his stake was puny: a tiny fraction of 1% in 1991.” That’s what created Liberty… And it worked.” - Malone Link to comment Share on other sites More sharing options...
Liberty Posted May 7, 2014 Share Posted May 7, 2014 http://investors.livenationentertainment.com/news-center/news-center-details/2014/Live-Nation-Entertainment-Reports-First-Quarter-2014-Financial-Results/default.aspx Live Nation: First Quarter Highlights (year over year): - Revenue Up 22% to $1.1 Billion - AOI Increased 56% to $83 Million - Operating Income Improved 63% to ($12) Million - Free Cash Flow Up 138% to $34 Million - Event-Related Deferred Revenue Up 14% to $885 Million - Concert Attendance Up 11% - Ticketmaster Resale Volume Up 40% in April Link to comment Share on other sites More sharing options...
thefatbaboon Posted May 8, 2014 Share Posted May 8, 2014 Liberty bought more Charter shares this week. Around 900k shares between 137.5 and 139.5. Link to comment Share on other sites More sharing options...
Guest JoelS Posted May 8, 2014 Share Posted May 8, 2014 John Malone’s Liberty Interactive Corp (LINTA.O) / Liberty Ventures (LVNTA) filed with regulators to spin off its stake in travel website TripAdvisor Inc (TRIP.O) and ownership of online retailer BuySeasons into a separate company valued at about $3 billion. http://spinoffmonitor.com/john-malones-liberty-ventures-lvnta-will-spinoff-its-stake-in-trip-advisor-buyseasons/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+SpinoffMonitor+%28Spinoff+Monitor%29&utm_content=Netvibes Link to comment Share on other sites More sharing options...
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