Liberty Posted July 28, 2014 Share Posted July 28, 2014 http://glennchan.wordpress.com/2014/07/28/lmca-liberty-broadband-spin-off/ Link to comment Share on other sites More sharing options...
dwy000 Posted July 28, 2014 Share Posted July 28, 2014 Good summary. I wonder if the other reason for the Rights Offering is that Broadband won't have much cash flow to service that $300M of debt (Charter doesn't pay a dividend and TruePosition doesn't throw off much cash. The TWC shares are probably offset by the liability on the TWC call option). Link to comment Share on other sites More sharing options...
Liberty Posted July 28, 2014 Share Posted July 28, 2014 For those of you who can read French, there's a pretty long interview with a few good value investors from France discussing John Malone, his history, techniques, companies, etc. http://linvestisseurfrancais.com/wp-content/uploads/2014/07/OIDf3-Aout-2014-Méthodes-de-Cow-Boy.pdf Link to comment Share on other sites More sharing options...
dwy000 Posted July 28, 2014 Share Posted July 28, 2014 Interesting that in the Rights Offering they are rounding UP fractional rights instead of down. So if you have 1 or 2 leftover shares you still get a right for them instead of needing the full 5. This will take the total number of rights (and therefore the total number of shares post offering) up. If it wasn't for the effort to get it done you could buy a whole series of single shares in different accounts and a great ROI! Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted July 29, 2014 Author Share Posted July 29, 2014 Interesting that in the Rights Offering they are rounding UP fractional rights instead of down. So if you have 1 or 2 leftover shares you still get a right for them instead of needing the full 5. This will take the total number of rights (and therefore the total number of shares post offering) up. If it wasn't for the effort to get it done you could buy a whole series of single shares in different accounts and a great ROI! What about withholding tax on the cash you receive for the fractional share of liberty broadband that you get? Seems like it would cancel out some of the value of the 1 right that you get. Hardly worth doing? Link to comment Share on other sites More sharing options...
Liberty Posted July 29, 2014 Share Posted July 29, 2014 http://investor.siriusxm.com/releasedetail.cfm?ReleaseID=862557 Revenue Exceeds $1.0 Billion, Up 10% From Second Quarter of 2013 Net Income of $120 Million Adjusted EBITDA Grows 31% to a Record $370 Million Free Cash Flow Increases 42% to a Record $335 Million Share Repurchases Exceed $1.6 Billion in 2014 2014 Financial Guidance Raised Link to comment Share on other sites More sharing options...
gokou3 Posted July 30, 2014 Share Posted July 30, 2014 Sirius May Buy Back $1.8 Billion More in Stock http://online.barrons.com/news/articles/SB50001424053111903849404580061413771816820?mod=_NewsCar_oe Could someone please kindly explain the following math: Investors buying Liberty Media stock are effectively buying Sirius for $2.51 a share (rather than $3.46). Following the Liberty Broadband spinoff [to include Charter Communications ( CHTR ) stock] later this year, Sirius should represent about 77% of Liberty Media's public market asset value and a huge discount.... Link to comment Share on other sites More sharing options...
Wilson-TPC Posted July 31, 2014 Share Posted July 31, 2014 Here's how it works: Link to comment Share on other sites More sharing options...
Liberty Posted July 31, 2014 Share Posted July 31, 2014 Charter Q2: http://phx.corporate-ir.net/phoenix.zhtml?c=112298&p=irol-newsArticle&ID=1953619&highlight= Key highlights: Pro forma1 for the acquisition of Bresnan, total residential customer relationships grew by 4.5% over the last twelve months, with second quarter residential revenue per customer growing 1.9% on a pro forma basis compared to the prior-year period. Residential customer relationships increased 27,000 during the second quarter, versus 2,000 during the second quarter of 2013. Residential primary service units ("PSUs") increased by 55,000 during the period, versus 28,000 in the year-ago quarter, including continued improvement in year-over-year video customer trends. Second quarter revenues of $2.3 billion grew 7.3% on a pro forma basis as compared to the prior-year period, led by residential revenue growth of 6.4%, and commercial revenue growth of 19.0%. Second quarter Adjusted EBITDA2 grew by 7.9% year-over-year on a pro forma basis. Net loss totaled $45 million in the second quarter of 2014, an improvement compared to a $95 million net loss on a pro forma basis in the year-ago period. Link to comment Share on other sites More sharing options...
dwy000 Posted July 31, 2014 Share Posted July 31, 2014 Wilson-TPC, thanks for the spreadsheet. A couple of things I didn't quite follow: - why is the sharecount for LMCA different post-spinoff? Shouldn't there be the same number of Liberty Media shares (just everyone now also holds Liberty Broadband shares as well)? - I thought the TWC shares were moving over to Broadband in the spin off; - LMCA isn't actually getting $300MM of cash from Broadband - LMCA is loaning them the $300MM which is immediately round-tripped back to LMCA so net-net LMCA doesn't get any cash but ends up with a loan due to them from Broadband of $300MM. Otherwise, the math on the left hand side walking through the deemed discount for Siri looks good (it's even bigger if you ascribe any value to TruePosition - although I think you also need to subtract out the liability on the TWC call options that will ultimately move over to Broadband, as well as any LMCA specific debt). Link to comment Share on other sites More sharing options...
buylowersellhigh Posted July 31, 2014 Share Posted July 31, 2014 LBRDA filing: http://spinoffmonitor.com/liberty-media-corp-lmca-spinning-off-cable-assets-into-liberty-broadband-lbrda/ Link to comment Share on other sites More sharing options...
Wilson-TPC Posted August 1, 2014 Share Posted August 1, 2014 Thanks dwy000, I just crunched it real quick to see what the value could be. I didn't make the adjustments yet, but roughly, it's a pretty big discount. You can get this discount on Siri or Charter. Whichever one you prescribe the discount to. Link to comment Share on other sites More sharing options...
Liberty Posted August 1, 2014 Share Posted August 1, 2014 http://www.sec.gov/Archives/edgar/data/937797/000122520814017678/xslF345X01/doc4.xml Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted August 1, 2014 Author Share Posted August 1, 2014 http://www.sec.gov/Archives/edgar/data/937797/000122520814017678/xslF345X01/doc4.xml On 07/29/2014, Malone traded: $3.166M in A shares sold. $6.333M in C shares sold. $9.500M in total. Link to comment Share on other sites More sharing options...
Wilson-TPC Posted August 4, 2014 Share Posted August 4, 2014 If you put the discount on the Charter stake, someone is effectively buying Charter for about 72 per share. Link to comment Share on other sites More sharing options...
dwy000 Posted August 4, 2014 Share Posted August 4, 2014 Not to nitpick but if you subtracted out the Liberty specific debt ($1.25bn) the discount comes down. It's still a huge bargain vs. Charter share price (or Siri if you want to put it against that side of the house). Link to comment Share on other sites More sharing options...
Liberty Posted August 4, 2014 Share Posted August 4, 2014 How did you arrive at the Braves value estimate? I can't be sure what the Braves are worth, but at an annual meeting someone asked Maffei if it made sense to value them around $1billion, and Maffei said jokingly that if that person had another Braves for sale for $1bn, he should come to him. Link to comment Share on other sites More sharing options...
Saidal Posted August 4, 2014 Share Posted August 4, 2014 I'm pretty sure Forbes pegged the Braves at ~$730MM or so, but I could be wrong. So if you go with that number, you have to get comfortable with their methodology. Link to comment Share on other sites More sharing options...
Wilson-TPC Posted August 5, 2014 Share Posted August 5, 2014 I took the Forbes number. By the way, the premium gap between LMCK and LMCA are closing in fast... I don't understand that. Can someone explain to me why? I bought a ton of LMCA today. Link to comment Share on other sites More sharing options...
loganc Posted August 5, 2014 Share Posted August 5, 2014 I took the Forbes number. By the way, the premium gap between LMCK and LMCA are closing in fast... I don't understand that. Can someone explain to me why? I bought a ton of LMCA today. Why do you think there should be a big price differential between LMCK and LMCA? How much is the voting right worth with the concentration in voting power that Malone has via the supervoting shares? Link to comment Share on other sites More sharing options...
Wilson-TPC Posted August 5, 2014 Share Posted August 5, 2014 I just look at LBTYK VS LBTYA, STRZA VS STRZB. I guess it wouldn't really make a difference since Dr. Malone controls 47.8% of the voting control. But the typical premium has been about 5%. Link to comment Share on other sites More sharing options...
Liberty Posted August 5, 2014 Share Posted August 5, 2014 I haven't had a chance to listen to the call yet, but this excerpt was interesting: http://www.hollywoodreporter.com/news/malone-talks-fox-time-warner-723092 Discussing Charter's deal, Malone reminded investors that Charter originally had gone after all of TWC. He argued that the deal Charter got in the end was "superior to the one they started with," saying "shareholders are better off" than if Charter had bought all of TWC. If the Comcast deal gets blocked by regulators, Charter could re-start full deal talks with TWC, "but that's not something we expect," Malone said. Link to comment Share on other sites More sharing options...
Wilson-TPC Posted August 5, 2014 Share Posted August 5, 2014 I don't know if you guys looked at this, but the Comcast Charter Spinco deal is SUPER SUPER accretive. Take a look at this. I used a mandatory 30% return discount rate. Link to comment Share on other sites More sharing options...
buylowersellhigh Posted August 5, 2014 Share Posted August 5, 2014 I don't know if you guys looked at this, but the Comcast Charter Spinco deal is SUPER SUPER accretive. Take a look at this. I used a mandatory 30% return discount rate. Fox drops bid for TWC: http://www.marketwatch.com/story/21st-century-fox-withdraws-bid-for-time-warner-2014-08-05-16911835 Link to comment Share on other sites More sharing options...
gfp Posted August 5, 2014 Share Posted August 5, 2014 TWX I don't know if you guys looked at this, but the Comcast Charter Spinco deal is SUPER SUPER accretive. Take a look at this. I used a mandatory 30% return discount rate. Fox drops bid for TWC: http://www.marketwatch.com/story/21st-century-fox-withdraws-bid-for-time-warner-2014-08-05-16911835 Link to comment Share on other sites More sharing options...
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