Wilson-TPC Posted July 30, 2014 Share Posted July 30, 2014 Thanks Liberty! Love the name btw. Link to comment Share on other sites More sharing options...
Liberty Posted July 30, 2014 Share Posted July 30, 2014 Thanks Liberty! Love the name btw. Trivia: I picked it before I had ever heard of John Malone or his companies. Good coincidence, because now I own shares of 3. Link to comment Share on other sites More sharing options...
Liberty Posted July 30, 2014 Share Posted July 30, 2014 Does anyone know when the QVC tracking stock will start? Looks like your question was just a bit early. Today's news: http://files.shareholder.com/downloads/AMDA-GY7JI/3361082641x0x772150/34a58c97-4587-49b6-b19a-44b88cb409a2/LINTA_News_2014_7_30_General_Releases.pdf Liberty Interactive still plans to create the QVC Group tracking stock, which will be comprised of its interests in QVC and HSN. In light of the pending Provide Commerce transaction, and other factors, Liberty is reevaluating the optimal structure and best alignment of the Liberty Digital Commerce Group assets. As a result, the timing of the transition to the QVC Group has been delayed. This is what they're talking about (on the LVNTA side): http://files.shareholder.com/downloads/AMDA-GY7JI/3361082641x0x772133/0338d1d5-ec21-410b-ae7c-e81355b7405b/LINTA_News_2014_7_30_General_Releases.pdf Link to comment Share on other sites More sharing options...
jay21 Posted July 30, 2014 Share Posted July 30, 2014 Does anyone know when the QVC tracking stock will start? Looks like your question was just a bit early. Today's news: http://files.shareholder.com/downloads/AMDA-GY7JI/3361082641x0x772150/34a58c97-4587-49b6-b19a-44b88cb409a2/LINTA_News_2014_7_30_General_Releases.pdf Liberty Interactive still plans to create the QVC Group tracking stock, which will be comprised of its interests in QVC and HSN. In light of the pending Provide Commerce transaction, and other factors, Liberty is reevaluating the optimal structure and best alignment of the Liberty Digital Commerce Group assets. As a result, the timing of the transition to the QVC Group has been delayed. This is what they're talking about (on the LVNTA side): http://files.shareholder.com/downloads/AMDA-GY7JI/3361082641x0x772133/0338d1d5-ec21-410b-ae7c-e81355b7405b/LINTA_News_2014_7_30_General_Releases.pdf Thanks for the update. I wanted more clarity on the eCommerce assets. However, I do not know what to think of this. 600m in revenue was exchanged for 430m in value. Obviously, if that multiple was applied to all other commerce businesses, the value would not appear too great. I would think that bodybuilding.com is much more valuable but we do not know how much more. Has anyone seen any more disclosure on the revenue and profitability of the commerce businesses? Link to comment Share on other sites More sharing options...
Liberty Posted July 30, 2014 Share Posted July 30, 2014 I've found it very hard to know what's going on with the ecommerce businesses, and I think that's how Malone wants to keep it for now. I wouldn't extrapolate the price of this deal to the whole group -- chances are, this was one of the weakest companies and they thought it would do better with more scale managed by someone else. The one I'm most interested about is CommerceHub. I think it could eventually be huge (it's more platform-like than the other businesses). Link to comment Share on other sites More sharing options...
jay21 Posted July 30, 2014 Share Posted July 30, 2014 I've found it very hard to know what's going on with the ecommerce businesses, and I think that's how Malone wants to keep it for now. I wouldn't extrapolate the price of this deal to the whole group -- chances are, this was one of the weakest companies and they thought it would do better with more scale managed by someone else. The one I'm most interested about is CommerceHub. I think it could eventually be huge (it's more platform-like than the other businesses). I think you are definitely right. I remember Greg saying that there were two ways to value the commerce businesses, based on EBITDA and revenue. He said if you place a multiple on EBITDA you would get ~1b in value and if you placed a multiple on revenue you might get ~10b. He thinks the right answer is somewhere in between. So I don't think this transaction is representative of the portfolio. He also has highlighted CommerceHub and Bodybuilding numerous times, so I think those are the standouts. Link to comment Share on other sites More sharing options...
Liberty Posted July 30, 2014 Share Posted July 30, 2014 He also has highlighted CommerceHub and Bodybuilding numerous times, so I think those are the standouts. The thing is, they talk a lot about Bodybuilding.com, but they mostly hide CommerceHub. In all their investor days (where they have the CEOs of a zillion companies make presentations, except CommerceHub), and presentations and conference calls, on the website, etc... I almost can't find any details on CommerceHub. I think they're keeping it in stealth mode, and when it finally comes out, the market will be surprised. That's one way to see it, anyway... Link to comment Share on other sites More sharing options...
Yours Truly Posted July 30, 2014 Share Posted July 30, 2014 As expected, the split-off will probably happen sometime next year, i'm betting on (Q2)... hopefully they will continue buying back shares at an accelerated rate.. I'm betting thats part of the reason why the stock is selling off today Link to comment Share on other sites More sharing options...
Liberty Posted July 30, 2014 Share Posted July 30, 2014 As expected, the split-off will probably happen sometime next year, i'm betting on (Q2)... hopefully they will continue buying back shares at an accelerated rate.. I'm betting thats part of the reason why the stock is selling off today Could be. My guess is that after the split, they'll try to merge QVC with HSN, further increasing profitability through scale and best practices, and the ecommerce businesses will get a much higher valuation as fast-growing standalones that aren't in the shadow of the QVC giant. The longer they wait for that, the more undervalued stock they can buy back in the meantime, so any delays are fine with me. Link to comment Share on other sites More sharing options...
investor-man Posted July 30, 2014 Share Posted July 30, 2014 CommerceHub definitely looks interesting. Wish we knew more about it Link to comment Share on other sites More sharing options...
dwy000 Posted July 30, 2014 Share Posted July 30, 2014 Get ready for a Liberty Flowers tracking stock soon. Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted July 30, 2014 Share Posted July 30, 2014 I think that Malone likes the high quality businesses like CommerceHub, bodybuilding.com, and TripAdvisor more than the other businesses in LINTA. The eCommerce businesses have shown very little OIBDA growth despite high revenue growth. They seem like they are in very difficult industries. And then there is the threat of Amazon crushing some of them. Malone will want to swap out of mediocre businesses into better businesses. The recent FTD deal is like a partial sale of the flowers business (unlike a sale, it is presumably tax efficient). Look for Malone and his #1 salesman Greg Maffei to try to wheel and deal their way into better businesses. Link to comment Share on other sites More sharing options...
siddharth18 Posted July 30, 2014 Share Posted July 30, 2014 Look for Malone and his #1 salesman Greg Maffei to try to wheel and deal their way into better businesses. That phrase evokes a negative connotation...are you saying the ProFlowers/FTD deal was detrimental to existing FTD shareholders? Average order value is/was lower for ProFlowers compared to FTD and the flower quality is inferior compared to FTD....but FTD does gain good leadership/capital allocation discipline from this deal...so not that bad? Link to comment Share on other sites More sharing options...
SI Posted July 30, 2014 Share Posted July 30, 2014 I have also found Proflowers has been a price leader at least in my purchases so removing them should alleviate price pressure potentially but lowering their proforma cost base relative to their competition. Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted July 30, 2014 Share Posted July 30, 2014 Look for Malone and his #1 salesman Greg Maffei to try to wheel and deal their way into better businesses. That phrase evokes a negative connotation...are you saying the ProFlowers/FTD deal was detrimental to existing FTD shareholders? Average order value is/was lower for ProFlowers compared to FTD and the flower quality is inferior compared to FTD....but FTD does gain good leadership/capital allocation discipline from this deal...so not that bad? Sometimes their deals will be a win-win situation. Sometimes their deals won't be. With ProFlowers/FTD, you can argue that there are certain synergies and advantages. 1- Having Liberty as a major shareholder may help corporate governance. 2- Lets FTD do something with excess cash. 3- Merger synergies. 4- Scale. May be important in eCommerce. I haven't looked into FTD much to be honest. Link to comment Share on other sites More sharing options...
siddharth18 Posted July 31, 2014 Share Posted July 31, 2014 Sometimes their deals will be a win-win situation. Sometimes their deals won't be. With ProFlowers/FTD, you can argue that there are certain synergies and advantages. 1- Having Liberty as a major shareholder may help corporate governance. 2- Lets FTD do something with excess cash. 3- Merger synergies. 4- Scale. May be important in eCommerce. I haven't looked into FTD much to be honest. Thanks. And I don't mean to hijack this thread...but FTD is quite easy to understand which is why I'm attracted to it. An under-followed, moated company with minimal capex needs (that doesn't screen well due to amortization of intangibles) selling for ~10x FCF and the two biggest impediments were (1) Amazon threat and (2) Capital allocation concerns. Now that Liberty is married to FTD, it definitely reduces (2). I think FTD can be levered to perform buybacks and increase returns...hopefully they will follow Liberty playbook down to a tee. http://seekingalpha.com/article/1833322-ftd-companies-an-undervalued-spin-off http://seekingalpha.com/article/1996271-ftd-companies-a-free-cash-flow-monster-with-50-percent-upside Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted July 31, 2014 Share Posted July 31, 2014 FTD: I see their P/FCF as being around 20 more than 10. Link to comment Share on other sites More sharing options...
dwy000 Posted August 4, 2014 Share Posted August 4, 2014 Glen - at first glance it does appear to be 20x but if you go a bit deeper the 10x seems to be closer to the ongoing reality. The more I dig, the more this looks like a classic Malone play (just like SIRI and QVC). Slow growth (okay that's not like SIRI) and great cash flow in a mature industry with little capex required - so a great return on capital. The results for 2013 include a number of one time items related to the spin-out from United Online. This includes $13.4M of direct expenses which can be added back to get ongoing operating income/cash flow. In addition, not immediately obvious is that they refinanced their debt in 2013 with the spin out and the lower interest expense should amount to $7M/year (their number). Note that they had negative working capital movement in 2013 of $25M due to timing although this largely offset 2012 where they had positive working capital movement of $25M due to timing. If you just average 2012 and 2013 (adding back the $13.4M transaction expenses) it's $57M of Operating Cash Flow per year. Add back the $7M of interest savings and that's $64M. With ongoing capex of $7-10M, that's $54-57M of free cash flow or about 10% yield on today's price (net of cash). Despite the one off expenses above, over the past 3 years the company has paid dividends to parent (United Online) of $52.5M and reduced debt by $38M. If you pro-rate for the interest savings of $21M ($7M/yr x 3), that's $111M of cash that can be used for buybacks in just 3 years. And all that before Malone/Maffei get at it. Imagine if they can shield some of the income from taxes, drive a little growth and better allocate the capital. Link to comment Share on other sites More sharing options...
investor-man Posted September 4, 2014 Share Posted September 4, 2014 I saw this article on Wired yesterday and it reminded me of CommerceHub -- not the same, but similar. I thought it would be of general interest: http://www.wired.com/2014/09/the-next-big-thing-you-missed-startup-aims-to-give-everyone-the-mighty-shipping-power-of-amazon/ Link to comment Share on other sites More sharing options...
Liberty Posted September 4, 2014 Share Posted September 4, 2014 There was also a presentation by the QVC CEO this morning. Last I checked the audio wasn't available yet, but it should pop up here at some point: http://ir.libertyinteractive.com//eventdetail.cfm?eventid=149438 Link to comment Share on other sites More sharing options...
Liberty Posted September 4, 2014 Share Posted September 4, 2014 I saw this article on Wired yesterday and it reminded me of CommerceHub -- not the same, but similar. I thought it would be of general interest: http://www.wired.com/2014/09/the-next-big-thing-you-missed-startup-aims-to-give-everyone-the-mighty-shipping-power-of-amazon/ Seems like Commercehub is all about agglomerating many companies together to get economies of scale, while Shyp has a different dynamic and won't benefit from growing. The more customers it has, the more courriers it needs, and the more complex its logistics become... Not sure it's a good idea. But I'll admit I skimmed the article and maybe they have a solution to this that I haven't seen. Link to comment Share on other sites More sharing options...
investor-man Posted September 4, 2014 Share Posted September 4, 2014 I saw this article on Wired yesterday and it reminded me of CommerceHub -- not the same, but similar. I thought it would be of general interest: http://www.wired.com/2014/09/the-next-big-thing-you-missed-startup-aims-to-give-everyone-the-mighty-shipping-power-of-amazon/ Seems like Commercehub is all about agglomerating many companies together to get economies of scale, while Shyp has a different dynamic and won't benefit from growing. The more customers it has, the more courriers it needs, and the more complex its logistics become... Not sure it's a good idea. But I'll admit I skimmed the article and maybe they have a solution to this that I haven't seen. That sounds right. They aren't the same, but the article made me think of CommerceHub. I wouldn't invest in Shyp until it was proven, but I like the business. I personally really dislike going to the post office or UPS/Fedex store, and I'd gladly pay a small fee to have a hipster (courier) show up at my door to do it for me. Link to comment Share on other sites More sharing options...
Liberty Posted September 4, 2014 Share Posted September 4, 2014 I personally really dislike going to the post office or UPS/Fedex store, and I'd gladly pay a small fee to have a hipster (courier) show up at my door to do it for me. Can't you already pay more to have a Fedex or UPS guy come to you for pickup? They might not bring a box and wrap the thing, though. Link to comment Share on other sites More sharing options...
investor-man Posted October 4, 2014 Share Posted October 4, 2014 Liberty Interactive Corporation Announces Reattribution of Digital Commerce Businesses and Dividend on Liberty Interactive Tracking Stock http://ir.libertyinteractive.com/releasedetail.cfm?ReleaseID=874545 Not exactly what was expected, but I think it makes sense. In the past I wondered why the digital assets weren't a part of Liberty Ventures. Link to comment Share on other sites More sharing options...
Liberty Posted October 4, 2014 Share Posted October 4, 2014 Liberty Interactive Corporation Announces Reattribution of Digital Commerce Businesses and Dividend on Liberty Interactive Tracking Stock http://ir.libertyinteractive.com/releasedetail.cfm?ReleaseID=874545 Not exactly what was expected, but I think it makes sense. In the past I wondered why the digital assets weren't a part of Liberty Ventures. I think I like this better than the original plan, but I might be missing some implications... Need to study Ventures again... Link to comment Share on other sites More sharing options...
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