LMCA - Liberty Media

[fareastwarriors]

http://online.wsj.com/news/articles/SB10001424052702304355104579236041351051938

 

John Malone: Cable's Pied Piper of Consolidation

 

 

 

[dcollon]

Time Warner Cable said likely to accept takeover bid in the $150-160 per share range-- Bloomberg

 

 

Bloomberg reports that TWC has hired MacKenzxie partners as a proxy advisor.

 

StreetAccount notes that several companies are reportedly considering a bid for the company, including Charter, Comcast and Cox.

[Liberty]

http://www.bloomberg.com/news/2013-12-05/time-warner-cable-s-incoming-ceo-ready-to-sell-if-price-is-right.html

 

Bit more color here. He sure seems willing to do a deal.

[fareastwarriors]

Malone’s Liberty in Takeover Talks With Dutch Cable Provider

 

 

http://dealbook.nytimes.com/2013/12/12/malones-liberty-in-takeover-talks-with-dutch-cable-provider/

 

Any potential deal for Ziggo, which could be worth more than 5 billion euros, or $6.9 billion, would be the latest in a string of acquisitions in the European telecommunications and cable industry.

 

Liberty Global, which owns the second-largest cable operator in Germany and has an almost 29 percent stake in Ziggo, bought the British cable operator Virgin Media for $16 billion this year.

[bmichaud]

Malone met with Paulson and other TWC shareholders.

 

http://www.bloomberg.com/news/2013-12-16/charter-said-to-tap-goldman-sachs-for-twc-bid-financing.html?cmpid=yhoo

 

 

Wouldn't be surprised to see Paulson come out in support of some TWC/CVC/CHTR combo transaction of some sorts, as he is a shareholder in both.

[Liberty]

Malone met with Paulson and other TWC shareholders.

 

http://www.bloomberg.com/news/2013-12-16/charter-said-to-tap-goldman-sachs-for-twc-bid-financing.html?cmpid=yhoo

 

 

Wouldn't be surprised to see Paulson come out in support of some TWC/CVC/CHTR combo transaction of some sorts, as he is a shareholder in both.

 

I think it'll happen because TWC shareholders can surely see how they'd make more money being lead by Malone and Rutledge, as part of a bigger entity that benefits from increased economies of scale.

 

But until a deal is done, it's in the interest of TWC holders to play hard to get and try to jack up the price. Hopefully they aren't too successful at that.

 

One thing I'm not sure about... Let's say TWC has a market cap of about 38 billion and charter 13.5 billion. Just adding them together, a combined entity should end up around 51.5b. If Liberty wants to maintain 27% ownership, that's 13.9 billion. Their current charter stake is worth about 3.6 billion. Would they really put 10 additional billions in the deal? From where? I suppose they could borrow against their SIRI stake and raise some long-term debt, and then spend the next few years deleveraging... Or maybe they'll do a deal with Comcast so they end up with a more digestible chunk.

[bmichaud]

Say a deal is done at $150 with $100 of cash and the rest CHTR stock. At a $130 CHTR PPS, they would need to issue 130MM shares, or roughly 106% of the current share base. So to maintain its 27% stake, Liberty would spend ~$4.1B. If the deal is done at $135, that falls to $2B.

[Liberty]

Say a deal is done at $150 with $100 of cash and the rest CHTR stock. At a $130 CHTR PPS, they would need to issue 130MM shares, or roughly 106% of the current share base. So to maintain its 27% stake, Liberty would spend ~$4.1B. If the deal is done at $135, that falls to $2B.

 

That makes a lot of sense, thanks.

[loganc]

Say a deal is done at $150 with $100 of cash and the rest CHTR stock. At a $130 CHTR PPS, they would need to issue 130MM shares, or roughly 106% of the current share base. So to maintain its 27% stake, Liberty would spend ~$4.1B. If the deal is done at $135, that falls to $2B.

 

I am just wondering where the $100 of cash comes from.  It seems like CHTR is trying to get 25B of funding and that leaves one like 3B short of $100 per share.  I am probably wrong, but it seems like Liberty is going to have to pony up more capital than 4B to keep their 27% ownership. 

 

Further, wouldn't a merger transaction be more attractive to TWC shareholders, rather than a bid comprised largely of cash at a modest premium? And let me clarify as I am a neophyte - what  I mean by merger transaction is a deal done primarily in stock.

 

 

[bmichaud]

Say a deal is done at $150 with $100 of cash and the rest CHTR stock. At a $130 CHTR PPS, they would need to issue 130MM shares, or roughly 106% of the current share base. So to maintain its 27% stake, Liberty would spend ~$4.1B. If the deal is done at $135, that falls to $2B.

 

I am just wondering where the $100 of cash comes from.  It seems like CHTR is trying to get 25B of funding and that leaves one like 3B short of $100 per share.  I am probably wrong, but it seems like Liberty is going to have to pony up more capital than 4B to keep their 27% ownership. 

 

Further, wouldn't a merger transaction be more attractive to TWC shareholders, rather than a bid comprised largely of cash at a modest premium? And let me clarify as I am a neophyte - what  I mean by merger transaction is a deal done primarily in stock.

 

You're right - $90 of cash has been the figure batted around. But I assume that is tied to a $130 to $135 bid range, which would imply $40 to $45 of stock. My example assumed a deal gets done at $150, where CHTR has to up both the cash and stock component.

 

If a deal is done at $135 with $90 of cash, then CHTR has to issue ~99MM shares ($45 x 286MM TWC shares out / $130 CHTR share price). Liberty would need to up its stake to ~55MM shares, from the current 28MM, which would cost ~$3.5B.

 

I would much prefer to see an all-stock deal. A $150 offer by CHTR with a $130 CHTR stock price would bring combined net debt down to 3.33X EBITDA. The pro forma company would trade at 8X 2014E EBITDA adjusted for CHTR's ~$3B of NOLs. Assuming the NewCo could bring margins up to 40%, they would trade at 7.2X EBITDA.

 

Alongside a merger announcement, NewCo could announce a $19B buyback program to be completed at the Company's discretion. This assumes max ND/EBITDA capacity of 5X minus the pro forma 3.33X. $19B would be ~33% of the NewCo market cap assuming a $130 CHTR share price.

 

This would be far more advantageous, as the NewCo stock price would likely decline post-merger as the arbs and other event-driven hot money exits the stock, and CHTR could take advantage of the weakness.

[Guest ajc]

Exclusive: Liberty sees $700 million Charter-Time Warner Cable synergies - sources

 

"Liberty Media Corp's top executives estimate that a merger between Charter Communications Inc and Time Warner Cable Inc could generate roughly $700 million in annual synergies, according to people close to the matter.

 

Liberty Chairman John Malone, who wants to use his 27 percent ownership in Charter to consolidate the cable industry, discussed the estimate when he, along with Chief Executive Greg Maffei, met with large Time Warner Cable shareholders in Denver last week, the people said.

 

Synergies from capital spending reductions, lower annual programming costs and other cuts in operating expenses are a key consideration for Time Warner Cable shareholders, as any takeover offer from Charter would include a large amount of its own stock..."

 

http://www.reuters.com/article/2013/12/19/us-timewarnercable-synergies-idUSBRE9BI0YO20131219

[loganc]

Say a deal is done at $150 with $100 of cash and the rest CHTR stock. At a $130 CHTR PPS, they would need to issue 130MM shares, or roughly 106% of the current share base. So to maintain its 27% stake, Liberty would spend ~$4.1B. If the deal is done at $135, that falls to $2B.

 

I am just wondering where the $100 of cash comes from.  It seems like CHTR is trying to get 25B of funding and that leaves one like 3B short of $100 per share.  I am probably wrong, but it seems like Liberty is going to have to pony up more capital than 4B to keep their 27% ownership. 

 

Further, wouldn't a merger transaction be more attractive to TWC shareholders, rather than a bid comprised largely of cash at a modest premium? And let me clarify as I am a neophyte - what  I mean by merger transaction is a deal done primarily in stock.

 

You're right - $90 of cash has been the figure batted around. But I assume that is tied to a $130 to $135 bid range, which would imply $40 to $45 of stock. My example assumed a deal gets done at $150, where CHTR has to up both the cash and stock component.

 

If a deal is done at $135 with $90 of cash, then CHTR has to issue ~99MM shares ($45 x 286MM TWC shares out / $130 CHTR share price). Liberty would need to up its stake to ~55MM shares, from the current 28MM, which would cost ~$3.5B.

 

I would much prefer to see an all-stock deal. A $150 offer by CHTR with a $130 CHTR stock price would bring combined net debt down to 3.33X EBITDA. The pro forma company would trade at 8X 2014E EBITDA adjusted for CHTR's ~$3B of NOLs. Assuming the NewCo could bring margins up to 40%, they would trade at 7.2X EBITDA.

 

Alongside a merger announcement, NewCo could announce a $19B buyback program to be completed at the Company's discretion. This assumes max ND/EBITDA capacity of 5X minus the pro forma 3.33X. $19B would be ~33% of the NewCo market cap assuming a $130 CHTR share price.

 

This would be far more advantageous, as the NewCo stock price would likely decline post-merger as the arbs and other event-driven hot money exits the stock, and CHTR could take advantage of the weakness.

 

Just out of curiosity, are you invested in LMCA or CHTR or both?  While I don't have a command of the CHTR/TWC numbers like you do, I understand the power of the potential scenario you are describing with an all stock deal - deleveraging for CHTR, facilitate the commencement of a huge buyback, etc.

 

However, it seems like an all stock deal is probably not the most likely scenario.  How do you see the deal working out?  Also, what do you make of the fact that Gabelli seems to think that CHTR won't get the deal done (starting at 1:00 approximately):

 

http://video.cnbc.com/gallery/?video=3000228925&play=1

 

As an aside, I agree with much of what Gabelli says in terms of the value of consolidation.  It is more than fighting content costs and short term synergies.  There is considerable value in having "fewer rational players" in cable (per Malone) to create value elsewhere.

 

To reiterate, it seems as though Gabelli is underestimating Malone to get the TWC deal done (@ 2:45 approximately).  Am I wrong in this thinking?  Based on what I have read, it seems like we have a negotiation situation where the bid/ask is 135/150.  Ultimately, I think Malone/CHTR get this deal.     

 

 

[bmichaud]

Just out of curiosity, are you invested in LMCA or CHTR or both?

 

 

Neither. I am playing it via TWC and CVC. My theory is that these two ultimately get rolled up into CHTR and/or LMCA at some point. My goal was/is to eventually own the CHTR entity, and I thought I could so-called purchase CHTR stock at a discount via TWC/CVC since they would need to offer a premium. In hindsight, I should have just purchased a basket of TWC/CVC/CHTR/LMCA, as the consolidation wave will benefit all.

 

While I don't have a command of the CHTR/TWC numbers like you do, I understand the power of the potential scenario you are describing with an all stock deal - deleveraging for CHTR, facilitate the commencement of a huge buyback, etc. However, it seems like an all stock deal is probably not the most likely scenario.

 

 

Definitely not the most likely scenario at this point, even though it makes so much sense. I think TWC shareholders want the cash, and nothing will get done without that at this point, since an all-stock deal would be viewed as "receiving an overvalued CHTR currency". If one can look out more than 12 months, as Gabelli and Malone are doing, there is SO much potential from a combined entity that you should prefer receiving stock in a deleveraged entity. Yes you can receive your cash and buy CHTR post-deal, but you are buying something levered at 5X versus the 3.3X I outlined. But whatever - I'll just wait for CHTR to hopefully trade down, then swap the cash received for TWC shares into CHTR, or perhaps a combination of CHTR and LMCA if LMCA goes low enough...if that's how the deal goes through....

 

How do you see the deal working out?  Also, what do you make of the fact that Gabelli seems to think that CHTR won't get the deal done (starting at 1:00 approximately):

 

http://video.cnbc.com/gallery/?video=3000228925&play=1

 

I never thought it would go through just CHTR and TWC. My original theory was CHTR/TWC/CVC in an all-stock transaction, as this would A) create an entity of virtually the same size as Comcast, and B) would combine the CVC/TWC NY assets. Now that Comcast is potentially involved, I think you might get some type of geographical consolidation, where Comcast/TWC/CVC dump the NY assets into one entity, then the remaining US assets get consolidated with CHTR. Who knows - not sure how large those companies would be. I think either way TWC and CVC have to combine in some way shape or form, given their NY assets run side-by-side (not my idea, Gabelli's thesis for years now....)

 

As an aside, I agree with much of what Gabelli says in terms of the value of consolidation.  It is more than fighting content costs and short term synergies.  There is considerable value in having "fewer rational players" in cable (per Malone) to create value elsewhere.

 

This is why I'm so bullish on this entire situation, not just for the short term consolidation premiums in TWC and CVC. Malone is looking to consolidate for a reason - he sees something long-term (he talks a lot about the low cost of boosting internet speeds and eventually charging for usage, for example...), and I want to be part of it.

 

To reiterate, it seems as though Gabelli is underestimating Malone to get the TWC deal done (@ 2:45 approximately).  Am I wrong in this thinking?  Based on what I have read, it seems like we have a negotiation situation where the bid/ask is 135/150.  Ultimately, I think Malone/CHTR get this deal.

     

 

I don't think he's underestimating Malone. I think he is just being realistic as to what is going on. Malone isn't going to buy TWC at any price, and if Comcast comes in at a price higher than he is willing to pay, then he'll have to propose another solution, as he will not let CHTR get left in the dust.

[Guest ajc]

Albany-based anti-Amazon hitting revenue targets

 

"The nation’s biggest retailers are arming themselves with a secret weapon against Amazon — and it’s coming from Albany.

 

CommerceHub, a tech company owned by billionaire John Malone’s Liberty Media, has watched growth skyrocket in recent seasons as it fuels online sales nationwide for chains like Walmart, Costco, Best Buy and JCPenney.

 

The service, which allows retailers to beef up their picks online without buying inventory or operating costly warehouses, was a big hit industrywide during the Thanksgiving weekend. It adds merchandise to client websites while making sure a network of third-party suppliers can deliver it posthaste...."

 

http://nypost.com/2013/12/22/albany-based-anti-amazon-hitting-revenue-targets/

[Liberty]

Albany-based anti-Amazon hitting revenue targets

 

"The nation’s biggest retailers are arming themselves with a secret weapon against Amazon — and it’s coming from Albany.

 

CommerceHub, a tech company owned by billionaire John Malone’s Liberty Media, has watched growth skyrocket in recent seasons as it fuels online sales nationwide for chains like Walmart, Costco, Best Buy and JCPenney.

 

The service, which allows retailers to beef up their picks online without buying inventory or operating costly warehouses, was a big hit industrywide during the Thanksgiving weekend. It adds merchandise to client websites while making sure a network of third-party suppliers can deliver it posthaste...."

 

http://nypost.com/2013/12/22/albany-based-anti-amazon-hitting-revenue-targets/

 

Thanks for sharing.

 

CommerceHub is part of LINTA, though, not LMCA.

 

It's the second time this week that I see a news organization mix up some of the Malone companies (I think it was the Economist saying that something was owned by Liberty Global when they meant Liberty Media). I suppose it shows that Malone's strategy of confusing everybody with complexity is working. The confusion leads to a market discount, which makes buybacks more effective. And then he can simplify things (and he's doing by splitting LINTA into two) when he wants the market to see the real value...

[Guest ajc]

Thanks for sharing.

 

CommerceHub is part of LINTA, though, not LMCA.

 

It's the second time this week that I see a news organization mix up some of the Malone companies (I think it was the Economist saying that something was owned by Liberty Global when they meant Liberty Media). I suppose it shows that Malone's strategy of confusing everybody with complexity is working. The confusion leads to a market discount, which makes buybacks more effective. And then he can simplify things (and he's doing by splitting LINTA into two) when he wants the market to see the real value...

 

It is the NY Post after all, though I should have caught that regardless.

 

Appreciate the correction.

[yadayada]

Im a bit drunk so take this fwiw.

 

first isnt the revenue from ripping people off by charging for TV that fewer and fewer people are now actually watching, simply being replaced by charging for data over the internet?

 

and second, I have some serious doubts about growth for increased download demand. 1920x1080 is really nice. And then you have those 4k resolutions. Those movies are a monster to download. But the problem is that on a regular tv that is about 40 inch, you barely see the difference between 1920x1080 and those 4k resolution movies. From personal experience. It is a bit like 3d tv, underwhelming. Unless you have a home cinema set, and a monstrous tv or a projector with that resolution, I doubt there is much demand for it.

 

It just seems to me they had to innovate with a new tv, and just upped the resolution a bunch. But who wants to pay more per month for something that is barely different then the regular 1920x1080 movie? The size of that movie would be like 12gb. For 35-60$ a month you get basicly 250gb. Who the fk wants to pay several 100$ a year for a difference you barely notice? Especially since most people dont own 70 inch tvs. Average size is currently under 30 inch. Unless you have a big house, you dont really want to own larger then 42-50 inch anyway.

 

Sure, malone is very smart. But maybe he is forgetting that most people dont own a large house with 80 inch tvs?

[Liberty]

Similar arguments were made about all kinds of things. It reminds me a bit of "640k of memory should be enough for everybody" or "there's maybe a market for 5 computers in the world". These are of course extreme, but if there's one thing we've seen so far, it's that when technology gives people a new capacity, people invents ways to use that capacity in some way or other, often with things they didn't even know they wanted to do. If you had told people just a few years ago that many of us would have terabyte hard-drives and run out of space, it would have seemed impossible. Or just look at what used to be "big" and "fast" and how ridiculously underpowered and small it seems now (want to do your stuff on a 60mhz Pentium with 16 megs of RAM? I started out on a 25 mhz 386 with 4 megs of RAM personally, and I had dreams about the first pentiums...).

 

It might not be just ever increasing resolution that fills the pipes. People certainly have more connected devices and spend more time online than ever before (remember when you had to be at a desk?), which means more data, and they get more and bigger apps, games, photos, streaming videos, etc. They share more stuff with more people -- who would ever have though of sending HD videos to multiple people from a phone?. And when they do have to download something big, they don't want to wait for it, or have junior take up all the bandwidth when other people in the house want to do something.

 

A lot of people could easily use multi-100s of mbits today, easily up to a gigabit, and cable is def the cheapest way to get that. In fact, I'd say that the biggest bottleneck these days is bandwidth; CPUs and GPUs and hard-drives have progressed a lot faster than bandwidth, and if you want to really make a difference for customers, increasing bandwidth is the low-hanging fruit.

 

That's just IMO, though. An empirical way to check would be to ask people with fast connections (200mbit/sec, 1 gigabit/sec) if they're noticing a difference, if the fast connection has changed their habits, and if they could ever go back to a slower connection and be satisfied.

[dcollon]

Legal Liberty Media Corporation Announces Proposal to Make Sirius XM Holdings Inc. a Wholly Owned Subsidiary of Liberty

Friday, January 03, 2014 09:35:00 PM (GMT)

 

 

Liberty Media Corporation ("Liberty") (Nasdaq: LMCA, LMCB) announced today that it has made a proposal to Sirius XM Holdings Inc. (Nasdaq: SIRI) ("Sirius") that outlines the terms by which Sirius public shareholders would become shareholders of Liberty in a tax-free transaction in which each share of Sirius common stock would be converted into 0.0760 of a new share of Liberty Series C common stock, and, immediately prior to such conversion, Liberty intends to distribute, on a 2:1 basis, shares of Liberty’s Series C common stock to all holders of record of Liberty’s Series A and B common stock to create a liquid trading market for Liberty’s Series C common stock. (The foregoing exchange ratio would be equivalent to a 0.0253 exchange ratio prior to the distribution of the Liberty Series C common stock dividend.) Upon the completion of the proposed transaction, Liberty expects that Sirius’ public shareholders would own approximately 39% of Liberty’s then-outstanding common stock.

 

"Our proposal will allow Sirius public shareholders to convert from a non-controlling stake in a subsidiary into a direct equity position in Liberty, the parent company,” said Greg Maffei, Liberty’s President & CEO. “Sirius shareholders will continue to participate in Sirius’ future prospects along with Liberty’s broader portfolio of businesses and opportunities. We believe the combined company will have better access to capital and all of Liberty’s shareholders — both its current shareholders and the Sirius shareholders who become Liberty shareholders as a result of the proposed transaction — will enjoy enhanced liquidity as shareholders of a $27 billion market capitalization company.”

 

“The proposed transaction is an important step in the growth of both companies,” said John Malone, Liberty’s Chairman. “It will enable us to focus our energies on the pursuit of new opportunities across the expanded portfolio of Liberty’s businesses and to optimize our capital structure to produce the maximum possible returns to all shareholders.”

 

The Series C common stock would be Liberty’s largest and most liquid series of stock. The proposed exchange ratio of 0.0760 would value Sirius common shares at approximately $3.68 per share based on closing prices of Liberty’s Series A shares on Friday, January 3, 2014. This exchange ratio represents a 4.5% premium to the exchange ratio implied by the closing prices of Liberty’s Series A and Sirius’ shares on Thursday, January 2, 2014 and a 3.1% premium to the exchange ratio implied by the closing share prices of Friday, January 3, 2014.

 

As explained in the proposal letter sent to Sirius, which will be filed promptly with the SEC, the proposed transaction would be subject to the negotiation and execution of mutually acceptable definitive transaction documents, the terms of which would be approved by a special committee of independent directors of Sirius, and would also be subject to a majority of the minority vote of the Sirius public shareholders. The approval by the Liberty shareholders of the issuance of the Series C common shares in the proposed transaction would also be required under applicable Nasdaq Stock Market requirements. Other than applicable filings with the Securities and Exchange Commission, Liberty does not anticipate that any additional regulatory approvals would be required.

 

Conference Call

 

Liberty Media will host a live webcast today at 5:00 p.m. ET (3:00 p.m. MT) to discuss this announcement. Please call Premiere Conferencing at (888) 417-2254 or (719) 457-2647 at least 10 minutes prior to the call. Callers will need to be on a touch-tone telephone to ask questions. The conference administrator will provide instructions on how to use the polling feature.

 

Replays of the conference call can be accessed after all appropriate filings have been made with the SEC through 7:30 p.m. (ET) on Friday, January 10th by dialling (888) 203-1112 or (719) 457-0820 plus the passcode 2899775.

 

[FiveSigma]

Could it be a maneuver to gain control over SIRI FCF so that they could use it to merge CHTR with some other player?

[yadayada]

Similar arguments were made about all kinds of things. It reminds me a bit of "640k of memory should be enough for everybody" or "there's maybe a market for 5 computers in the world". These are of course extreme, but if there's one thing we've seen so far, it's that when technology gives people a new capacity, people invents ways to use that capacity in some way or other, often with things they didn't even know they wanted to do. If you had told people just a few years ago that many of us would have terabyte hard-drives and run out of space, it would have seemed impossible. Or just look at what used to be "big" and "fast" and how ridiculously underpowered and small it seems now (want to do your stuff on a 60mhz Pentium with 16 megs of RAM? I started out on a 25 mhz 386 with 4 megs of RAM personally, and I had dreams about the first pentiums...).

 

It might not be just ever increasing resolution that fills the pipes. People certainly have more connected devices and spend more time online than ever before (remember when you had to be at a desk?), which means more data, and they get more and bigger apps, games, photos, streaming videos, etc. They share more stuff with more people -- who would ever have though of sending HD videos to multiple people from a phone?. And when they do have to download something big, they don't want to wait for it, or have junior take up all the bandwidth when other people in the house want to do something.

 

A lot of people could easily use multi-100s of mbits today, easily up to a gigabit, and cable is def the cheapest way to get that. In fact, I'd say that the biggest bottleneck these days is bandwidth; CPUs and GPUs and hard-drives have progressed a lot faster than bandwidth, and if you want to really make a difference for customers, increasing bandwidth is the low-hanging fruit.

 

That's just IMO, though. An empirical way to check would be to ask people with fast connections (200mbit/sec, 1 gigabit/sec) if they're noticing a difference, if the fast connection has changed their habits, and if they could ever go back to a slower connection and be satisfied.

what are bandwith caps like in the US? I dont really have bandwith cap problems where I live. What do you mean by up to a gigabit today? Is that today? or is that download speed per second. It seems a bit overkill to download 125mb per second. What will you need that for? Why would people pay for that?

 

The thing is, the argument that we said this years ago doesn't fly. Games have almost reached fotorealistic, and it has become too expensive now to create games with insane graphics. Only a few studio's can afford that. If you look at the next gen consoles, they are not that faster, they focus more on social gaming. And you dont need a 125mb/s connections to download a 50mb app. It is not like people dont want to wait 10 seconds instead of 1. And most people still pick up their console games at the stores. Actually runs faster in some cases as well.

 

ANd second, video is pretty much the only thing that eats up bandwith. And like I said, we have reached a cap. We have gone to foto realistic now. Everything else like social media or foto's barely eats up bandwith. The only reason pretty much would be those 4k resolution things.  4k is overkill unless you have a 60-70 inch television. But I am not sure people will pay a premium for that. And tv will always exist, be it in a smaller form. But the amount of subscriptions world wide for cable tv still seems to be rising.

 

I mean so far we have gone from VCR quality, to foto realistic quality. Unless there is a break through in technology where you can go into hyper realistic VR worlds, we dont really need those 100 mb/s connections. And that tech is still at least 10-20 years away.

 

And especially now that everyone is moving into smaller devices, you dont even need the 1920x1080 resolution in alot of cases on smart phones or tablets. So you could argue that tablets actually take down bandwith caps a bit.

 

I see that people talking like this, are always reasoning in a very general way. But once you zoom in on the details, you realize we dont really need faster speeds.

 

To do a quick calc, assuming you use internet like a music and movie/tv junkie, i still cannot get over 400gb a month in data. you would download that in like 1-2 hours with those insane speeds. Today's speeds are more then enough, but I guess its the data limit that is the problem if your a heavy music and tv/movie user. But im not sure how you would get at several terrabytes. You would really have to be plugged into music and movies at insane high and unreasonable quality all the time before you would get there.

 

http://reviews.cnet.com/8301-33199_7-57366319-221/why-4k-tvs-are-stupid/

 

We can barely even see the difference between 720 and 1080. You honestly think people will pay 50$ a month extra for an unnoticable difference?

[Guest wellmont]

Albany-based anti-Amazon hitting revenue targets

 

"The nation’s biggest retailers are arming themselves with a secret weapon against Amazon — and it’s coming from Albany.

 

CommerceHub, a tech company owned by billionaire John Malone’s Liberty Media, has watched growth skyrocket in recent seasons as it fuels online sales nationwide for chains like Walmart, Costco, Best Buy and JCPenney.

 

The service, which allows retailers to beef up their picks online without buying inventory or operating costly warehouses, was a big hit industrywide during the Thanksgiving weekend. It adds merchandise to client websites while making sure a network of third-party suppliers can deliver it posthaste...."

 

http://nypost.com/2013/12/22/albany-based-anti-amazon-hitting-revenue-targets/

 

gosh malone has a great pr rep.

[Yours Truly]

Liberty Media proposes to assume full ownership of Sirius XM

04:51 PM ET · LMCA

 

Liberty Media (LMCA), which already owns a majority stake in Sirius XM (SIRI), is proposing to make Sirius a 100%-owned subsidiary through an all-stock deal. (PR)

Liberty proposes to have each Sirius converted into a 0.076 new Liberty Series C shares, and then distribute, on a 2:1 basis, Series C shares to all holders of Liberty's Series A and B shares.

The exchange ratio values Sirius at $3.68/share based on Liberty's Friday close; that's an $0.11, or 3%, premium to Sirius' closing price of $3.57.

Sirius' public shareholders would own 39% of the new company, which (based on current prices) stands to have a market cap of $27B.

[ItsAValueTrap]

So the implication is that Liberty thinks Sirius XM shares are better than Liberty Media shares?

 

I thought the opposite... Liberty was buying back shares for a reason.

 

2- Or... Liberty simply wants to combine the two companies to help Charter finance its consolidation of the cable industry.

[Liberty]

I like it. If there's someone that can create lots of value with full control of SIRI's FCF and debt capacity, it's Malone.

 

It also means, if the deal goes through, that SIRI's big buybacks will also increase per share economic ownership in Liberty's other assets (biggest are of course CHTR and LYV) rather than just in SIRI. Not a bad thing since they're high quality and LMCA often sells at a discount because of its complexity.

 

In fact, I wonder if swallowing SIRI might not make Liberty Media harder to value for the market. It's kind of the reverse of what they're doing at LINTA by spinning off QVC/HSN.

 

Is Malone trying to get a new source of cashflow and create a discount in the stock at the same time to make large buybacks easier and more accretive? First priority is probably to help Charter do a big deal, but I'm pretty sure that he wouldn't mind doing what he's done so often in the past again (create more complexity than the market can handle and then buy back a huge chunk at at a discount, later simplify things with spinoffs and watch the market recognize the value).