Corner of Berkshire & Fairfax Message Board

General Category => Investment Ideas => Topic started by: Sportgamma on August 11, 2012, 08:10:38 PM

Title: GLIBA/LVNTA - GCI Liberty
Post by: Sportgamma on August 11, 2012, 08:10:38 PM
I´ve only gone over this briefly, so input from others would be greatly appreciated:

Linta recently split itself into linta and lvnta or Liberty Ventures.

The conversion was 1 lvnta share for 20 linta shares and according to the S-4 60% of long term liabilities would belong to linta.

So here are the market values:

Tracking stock   Ticker   Shares outstanding      Price per share      MarkCap
Interactive   linta   550.85                          17.52                               9,650
Ventures   lvnta     27.54                          45                                             1,239
Total                                                                                  10,890

Looking under the hood:

Interactive (LINTA)

Operating income                3Q11   4Q11   1Q12   2Q12   L4Q
Liberty interactive    224   408   258   290   1,180

+

Public   Ticker   Stake   MarCap   Stake ($m)
HSN Inc.   hsni   34%   2,520   856,8

Ventures (LVNTA)

Ventures                 ticker   Own%   MarCap   Stake ($m)
AOL                               aol   2%     3,170   63,4
Expedia                               expe   26%     7,390   1921,4
Interval leisure group   iilg   30%     1,080   324
Time Warner Cable   twc   2%   27,560   551,2
Time Warner Inc                 twx   2%   40,700   814
Tree.com                 tree   25%        158   39,5
Trip Advisor                trip   26%     5,000   1300
Total                                         5,013.5


Cash            790     
Debt            6374   
Net            -5584

Valuation

Together it could look something like this (assuming NPV10 for the ops) :


Together   $M
Interactive NP10   11,800
HSN Inc.                      856.8
Ventures     5,013.5
Cash                      790
Debt                   -6374
Value                 12,086.3
MarkCap                 10,890

Upside   11%

But if you brake it up, it seems that ventures is seriously undervalued, despite it consisting solemnly of publicly traded entities :

Tracker                 MarkCap                 Gross intr.   Net debt    Net intrinsic   Upside
Interactive   9,650.9                 12,656.8      -3,350.4          9,306.4        -4%
Ventures   1,239.4                   5,013.5      -2,233.6          2,779.9      124%

-----------

Edit: The tables got all mixed up. This should be a bit better:

(http://sportgamma.files.wordpress.com/2012/08/split.jpg)

(http://sportgamma.files.wordpress.com/2012/08/split-2.jpg)
Title: Re: LVNTA - Liberty Ventures
Post by: Olmsted on August 12, 2012, 08:56:06 AM
Good call.  I calculated the NAV of Ventures as $116.50 on Friday (in line with your calculations above).  Last trade at $45 implies some serious upside if it trades closer to NAV.

A couple items to keep in mind:

-There is a rights offering (one right for every 3 Ventures shares outstanding, distributed to the pre-splitoff holders of LINTA).  The exercise will be set at a 20% discount to Ventures' first 20-day average price.  Let's say it trades up to an average of $50 for the next 20 trading days.  1/3 dilution at $40 would put the post-rights NAV at $99.  So the discount is not quite as great as it first seems, and the degree of discount does depend on how it trades these next four weeks.  It will still be substantial though.

-Ventures' assets are not necessarily value investors' favorites. 

-Various incarnations of the Malone Liberty family have often traded at discounts to their holdings, for long periods of time.  This has been especially true of the "asset-only", non-operating pieces like Ventures.  I guess the reasons have been the usual holding company issues, tracking stock structure, deferred tax liabilities (can't sell the holdings without paying capital gains), and relative opacity of the Malone leadership style.  And he has been known to shuffle and re-combine tracking stocks at terms that feel disadvantageous and arbitrary to one class or the other (like when LSTZA was combined with LCAPA not long ago).  On the other hand, Malone is a master of tax avoidance, and the structural shifts in the company are to that end.  Still, I would not expect Ventures to trade at my calculated NAV any time soon, if ever.  However, the discount may narrow over time.
Title: Re: LVNTA - Liberty Ventures
Post by: Sportgamma on August 13, 2012, 11:52:43 AM
Thanks for the response Olmsted.

Very good points.

I never really got it why they included the venture assets (that is all of the public stakes, except HSN) in Liberty Interactive to begin with and not just keep them in Liberty Capital. Do you see a scenario where they would try to pull Ventures into Capital? As these are now two separate publicly traded entities, it would be much more difficult for them to do then, for example, the LCAPA/LSTZA re-comb.

Title: Re: LVNTA - Liberty Ventures
Post by: Olmsted on August 13, 2012, 12:49:17 PM
I never really got it why they included the venture assets (that is all of the public stakes, except HSN) in Liberty Interactive to begin with and not just keep them in Liberty Capital. Do you see a scenario where they would try to pull Ventures into Capital? As these are now two separate publicly traded entities, it would be much more difficult for them to do then, for example, the LCAPA/LSTZA re-comb.

I can't begin to guess at what manouvring Dr. Malone is up to.  Yes - it seems that Ventures and Capital would naturally go together.  Could Malone combine them at some point, after spinning out Starz?  Sure - why not?  Perhaps this is why Starz is being spun.  But I really have no clue.

PlanMaestro pointed out to me in another venue that if you compare enterprise value to total assets, the discount is much less.  Which is probably a better way to think about MoS.  The company is levered with $3bn in debt.  So comparing $1.2bn in equity market cap + $3bn in debt to $4.85bn in investments + $1.33 bn in cash gives you a 33% discount enterprise value to total assets.  A 40% decline in Ventures' minority stakes would wipe that discount out.
Title: Re: LVNTA - Liberty Ventures
Post by: Sportgamma on August 13, 2012, 07:54:18 PM

http://www.scribd.com/doc/98323186/ValueXVail-2012-Patrick-Brennan
Title: Re: LVNTA - Liberty Ventures
Post by: Olmsted on August 14, 2012, 06:31:18 AM
This guy, who clearly has a better understanding of Ventures than I do, thinks it's fairly priced right about now:

http://glennchan.wordpress.com/2012/08/14/liberty-ventures-not-that-interesting-at-40/

Really it comes down to the assumptions you make around the deferred tax liabilities.  With the leverage and the magnitude of the deferred tax liabilities, small changes in assumptions one way or the other can result in large swings in implied value.
Title: Re: LVNTA - Liberty Ventures
Post by: ItsAValueTrap on August 15, 2012, 02:38:53 AM
Quote
I never really got it why they included the venture assets (that is all of the public stakes, except HSN) in Liberty Interactive to begin with and not just keep them in Liberty Capital.
A long time ago, Interactive corporation split into:
HSN
Expedia
Trip
lending tree
???  (can't remember if there was another one)

HSN and Interactive/QVC obviously go together.  (Ok, you can make an argument for keeping them separate.  But as a pure play stock, it makes sense to lump the two together.)

So I *think* that is why those random stocks are in Interactive.

2- The exchangeable debentures are in Interactive because they throw off tax deductions.  The QVC business in Interactive generates lots of taxable income; Liberty Capital does not.

And with the exchangeable debentures you want to keep the Time Warner shares too because the TWX/TWC shares are a really good hedge for the debentures.

Quote
Do you see a scenario where they would try to pull Ventures into Capital?
I doubt it.  There's no synergy there.

I think the reason why Malone keeps splitting up all the companies is to create trading opportunities.
Malone can buy/sell shares of the various Liberty companies if they are over/undervalued. 
The individual stocks can use their shares are currency to buy other companies.  This sort of allows them to get rid of bad businesses.

On the other hand, easily understood stocks that are pure play tend to trade at a higher value than complicated conglomerates.  So this hurts the ability of some stocks to buy back their shares.  You can argue that it's good for Malone to have complicated tracking stocks so that they trade at a discount for long periods of time... therefore the companies can make easy money by buying back their shares.

This suggests that he is going to figure out how to sell off Starz.  It's a mature business without much in the way of growth prospects.  Sort of like a fully valued cigar butt than a See's Candies or a GEICO.
Title: Re: LVNTA - Liberty Ventures
Post by: Olmsted on August 15, 2012, 05:40:25 AM
Here's a good "plain English" explanation of why they are doing yet another tracking stock split.  Bottom line is that LINTA can be valued more easily as an operating company that throws off cash, with all the complicated accounting/debentures/"weirdness" isolated in LVNTA.   Of course, that's just the official explanation.  There is undoubtedly a subtext/ulterior motive along the lines described by ItsAValueTrap above.

ValueTrap, it's also interesting that you bring up buybacks.  Greg Maffei said that their intention was to crank up buybacks at LINTA.  No mention of buybacks at LVNTA.  Actually - he mentions that the rights offering and cash at LVNTA is "not only to fund business opportunities but ensure adequate capitalization... and be able to handle its debt" - an explanation which makes buybacks seem less likely. 

Quote
Gregory B. Maffei, President & Chief Executive Officer

On February 23, we announced that Liberty Interactive was going to become two tracking stocks: Liberty Interactive, which we trade under LINTA and LINTB as it has, and Liberty Ventures. And for each share of Liberty Interactive, you get 1/20 of a share of Liberty Ventures or a 20-for-1 reverse split. And we’re in the process of doing that. We filed our amended S-4 this week. We are seeking a shareholder vote, which we anticipate to have in early July, and then we’ll close soon thereafter. We will not require an IRS ruling. So we’re well in process, we think, and we’ve had, as I said, good work with the SEC.

Some of you have asked why we are going back into tracker land. And our logic and rationale we hope that proves to bear fruit is that this will increase transparency and investor choice, providing investors who want to have an opportunity to invest in a focused Liberty Interactive around video and e-commerce, providing greater clarity and focus around our video and e-commerce assets and businesses, highlighting the operations and businesses that we have therein and the financial strength of those, simplifying our story in Liberty Interactive, better aligning us for people who look at retail and e-commerce, better aligning us for a purer comparison, and isolating the complexity that is inherent in Liberty Interactive into Ventures.

At Ventures, we hope to highlight some of the investments we have that are not significant within the context of Liberty Interactive today to become meaningful inside Ventures. We think it’s the same pitch that we have with Liberty Capital to bet on management, of Liberty’s ability to over time clarify, reduce the discount, simplify, and create value. We obviously have some tax advantages inside Liberty Ventures which are complicated. We think that certain investors will appreciate an opportunity to invest in those and others will prefer to be isolated from those. As always, we look, when we have this clarity to be able to raise capital more efficiently at either entity. And we think the tracking stock structure maintains tax efficiency.

So just to highlight for one second, I think as most of you know, the major assets inside of Liberty Interactive will be QVC, which we’re here to talk about primarily today; our e-commerce companies, which are the specialized niche e-commerce companies that we have; our 34% interest in HSN; and cash of approximately $0.5 billion. And I say approximately because it depends on what we draw on the revolving credit facility and what cash we earn between now and close.

On the liability side, we’ll have the $2 billion of bonds that are at QVC today. We’ll have our $2 billion revolving credit facility, of which we expect somewhere about $1.4 billion will be drawn. And we’ll have the senior notes that are up at the Liberty Interactive level that we call our straight debt, the $309 million issue, the $287 million issue, and the $504 million issue.

Everything else will go into Ventures. And by that we mean our non-consolidated assets you can see here, AOL, Expedia, Interval, Time Warner, Time Warner Cable, Lending Tree, TripAdvisor, and the small amount of green investments we’ve done today in things like a leveraged lease in a wind facility and a coal transformation plant which reduces nitrous oxide to mercury, and cash of about $1.6 billion. Obviously, that cash value is moving around depending on how we settle out on some of these assets. We had originally thought we would go out with about $1.25 billion. But as we’ve made credit liquidity events [at] TripAdvisor, we’ve increased the amount of cash that will be there. On the other side, with all the exchangeable debentures, many of which have favorable tax characteristics that we talk about and have a degree of complexity, so we tried to isolate all the complex assets, non-consolidated assets that are not core to our e-commerce efforts and all the debt that is complicated into this one venture.

People have asked about our subscription rights offering that we’ve talked about with this. And the goal first of this is to raise incremental capital for Ventures. Why do you care, why should you care as potentially a Liberty Interactive investor in Ventures capitalization? Because they are tracking stock, both parts are liable for the debt. We want to ensure that Ventures is well capitalized to be able to handle its obligations as they come due and never need to rely on Interactive. We believe that is the case as we built cash at Ventures. But by funding incremental cash to this rights offering, we hope to ensure that.

And as we’ve talked about, we expect that you’ll have one subscription right for every three shares of Liberty Ventures as that tracking stock is distributed. These rights will give you a subscription price, the right to buy the stock of Liberty Ventures at a 20% discount to the . . . first 20 days of trading stock price, the VWAP [Volume Weighted Average Price] over those first 20 trading days. And as that becomes traded, we’ll know the rights will become traded. The rights offerings expire 20 days after the price is set, and you’ll have the opportunity to buy more stock if you so choose or sell the rights. As I mentioned, really this is not only to fund the business opportunities but ensure adequate capitalization at Ventures and be able to handle its debt.

Now we think both of these sides will be very well capitalized, and in particular Liberty Interactive given its revolving credit facility, its relatively low leverage, and the continued free cash flow it has been generating, we expect it will generate, should have an opportunity to have major share repurchase. That has been our strategy at Liberty Interactive. I expect that will continue to be our strategy at Liberty Interactive. We will go out and look for incremental e-commerce opportunities. We’ll look to do other things. But first and foremost, I expect we’ll be repurchasing stock. This chart shows how much stock we have bought back. And you can see that we’ve driven down the share count substantially. And I said I expect we’re going to continue to drive it down.

http://www.sec.gov/Archives/edgar/data/1355096/000110465912040342/a12-5904_5425.htm
Title: Re: LVNTA - Liberty Ventures
Post by: ItsAValueTrap on August 17, 2012, 04:44:14 PM
Btw Olmsted, you linked to my blog.  :)  That is me.

1- Buybacks:  At LINTA I think it definitely makes sense as it is a nice business with growing free cash flow.  I haven't read its 10-K yet or done research on it though.

On the other hand, I note that insiders are selling their LINTA shares.  Sometimes I wouldn't read too much into insider selling... sometimes sales occur when the stock is cheap (Bill Gates didn't sell during the Internet bubble but is selling now to fund his charity).  Sometimes people just want to diversify instead of putting all their eggs in one basket- your significant other might freak out that almost all your net worth is tied to the fortunes of one company.  The insider sales might mean something, or it might now.

1b- On a superficial look at LINTA, the e-commerce side seems just ok.  I feel like the ecommerce/Internet retailing market as a whole has grown faster than Interactive's... but I am not 100% sure.  Certainly, Amazon and Google (their ad revenues is mainly from online retailers in my opinion) have grown faster than Interactive's ecommerce.  But their ecommerce properties aren't terrible either.  It's just that sometimes you don't want to own a second-tier company... look at what happened to RIM's share price lately (I own RIM).  It will be really scary if Amazon (or even Walmart) can use their scale to have highly efficient warehousing and distribution systems that make them the lowest cost online retailer.  We could move into a world where the distribution of profits becomes extremely uneven where the first-tier companies make almost everything and the second-tier companies (some of Interactive's ecommerce may be second tier or worse) get pushed out and can only hang onto a small specialized niche.
Maybe I am paranoid.

There are definitely companies a lot worse than Interactive's ecommerce like Bidz and (not sure if I should say this here) Overstock.  I would be too paranoid to own those stocks.  I just feel like it's a much better idea to find the See's Candies of online retailers (Amazon) and buy them if their valuation is reasonable (Amazon is overpriced).

2- I would happy to own Interactive and Ventures at current prices.  I just didn't buy any.  I don't think that Ventures is clearly undervalued right now.  It's sort of like owning Wesco- great management but the underlying business is just ok (whereas Berkshire Hathaway has first-tier companies like GEICO).  It's ok to own Wesco when it isn't trading at a discount.  It's just that I'd rather buy it cheap.

3- It's possible that I have miscalculated how much cash Interactive transferred to Ventures.  But because I don't know the right answer... I will err on the conservative side for now and read the 10-Q when it comes out.

4- Regarding Patrick Brennan's presentation on LVNTA linked to earlier:
http://www.scribd.com/doc/98323186/ValueXVail-2012-Patrick-Brennan

His calculation of fair value is far higher than mine and that is *after* a 25% complexity discount.

I see his comparable yield figures (for the exchangeable debt) and am not sure about them.  I have read the S (S-4?) filings of Liberty's debt and the comparable yield figures are different for the same series of debt. 

I believe he made a mistake on the value of Ventures' stocks... you need to account for the tax that needs to be paid on them as their market values are far above their carrying values and their cost basis.

In terms of the cash, he may or may not be counting things twice.  e.g. EXPE and TRIP shares were sold... you need to be careful not to count the shares *and* the cash from the sales.

5- I think the exercise at LVNTA is selling its old businesses at good prices in a tax-efficient manner.  And hopefully they can re-invest that into new businesses with attractive economics (hopefully See's Candies type business, green businesses with tax-advantaged characteristics, odd situations like Sirius, etc.).

It's unclear to me if Malone is seeing a lot of great opportunities out there.  (It's not like it's 2008/2009 anymore.)  The leveraged lease on a wind facility suggests that he is getting into utilities.  He hasn't bought anything in the media sector for a while (his historic bread and butter), possibly because of the impact of the Internet on the sector (piracy, IPTV, shift towards online content, etc.).

Malone personally owns one of the largest cattle ranching business or something like that.
Title: Re: LVNTA - Liberty Ventures
Post by: rimm_never_sleeps on August 17, 2012, 06:06:52 PM
it looks like you have about a $60 difference in your valuation with the one presented at valuex. thanks for preparing yours by the way.

Let's say his fair value is $100; but he thought it would deserve to trade at $75 post rights due to complexity.

I'd like to go at this from a slightly different angle and maybe do some triangulation to back into an alternative way of approaching this situation. An investor might use a similar approach, combined with rigorous valuation work, to his advantage as he contemplates the merits of lvnta.

What do we know about spin offs? well we've all read the great Greenblatt book. And that's why we like to look at them. He believes that a lot of spin offs come out undervalued. he says you could focus on this one area of the market and do very well.  It's kind of the nature of the beast. If you follow his thinking, it almost has to be that way. Even Moody's came out undervalued.

Be that as it may. They certainly don't Have to come out undervalued. But we do know the odds favor it. lvnta is even a little dicier than the average spin-off. It has lots of funky qualities that might make it even more "special" than a normal spin off. I mean even hard core number crunching value investors don't seem to want any part of it. And if they don't who does? It's extremely complex. A lot of work doesn't necessarily pay-off in certainty.

But let's get started.

Does a uniquely complex security have more of a chance to come out undervalued or fairly valued? My guess would be Undervalued.

Given who owns this stock, are investors more inclined to keep linta and sell lvnta or keep them both? My guess is they are more inclined to sell lvnta.

Given the nature of tracking stocks. Are they more popular or less popular than Ccorps? I would say Less popular.

Given the nature of Lvnta collection of assets, is that a collection that people would want to own, or have to own? I would say neither. It's structured in a way to make people not want to deal with it.

Given that it was spun off in early august into a dull market with little fanfare and zero media attention, is that more likely to produce a security that is fairly valued or undervalued? I would guess undervalued.

Given the size of the company (small cap) and the small number of shares outstanding, and people not wanting to mess with a rights offering, does that make it more or less likely that larger institutions would sell lvnta or hold it or buy it? I would guess Sell it.

Given that there are no sell side analysts really sponsoring this thing with very little incentive to do so, does that make it more likely it would be undervalued or fairly valued? I would say undervalued.

What I am getting at here is by examing all these various factors (call them technical if you like) one can kind of come to a "qualitative" opinion, irregardless of the complex valuation, whether it is more likely or less likely to be trading at fair value. Taking all of this under consideration, my opinion is that it's way less likely to be trading at fair value, and likely trading undervalued. Your conclusion may be different.

Finally, you have the Malone factor. When he has a pile of assets in front of him, he has a history of creating massive shareholder value. So even people who buy liberty's various stocks at fair valuations have done very very well because of his team's unfailing value creation. It can give an investor confidence that he doesn't have to get the bottom tick to do very well over time.

Once again thank you for taking a crack at the valuation.That's way more than I did. I really appreciate the Bresnan valuation as well. These reports give us two really good starting points, and combined with the above observations (speaking for myself), helps each investor decide what to do next.

regards
Title: Re: LVNTA - Liberty Ventures
Post by: Olmsted on August 18, 2012, 06:42:07 PM
Well I must say that this discussion is getting to be really fun.

Btw Olmsted, you linked to my blog.  :)  That is me.

Good stuff!  I read through all the posts in the last couple days, enjoyed them mightily. 

1b- On a superficial look at LINTA, the e-commerce side seems just ok.  I feel like the ecommerce/Internet retailing market as a whole has grown faster than Interactive's... but I am not 100% sure.  Certainly, Amazon and Google (their ad revenues is mainly from online retailers in my opinion) have grown faster than Interactive's ecommerce.

On the other hand, and in contrast to Amazon, it seems that QVC actually has a nonzero profit margin and generates free cash flow (imagine that!).

I believe he made a mistake on the value of Ventures' stocks... you need to account for the tax that needs to be paid on them as their market values are far above their carrying values and their cost basis.

In terms of the cash, he may or may not be counting things twice.  e.g. EXPE and TRIP shares were sold... you need to be careful not to count the shares *and* the cash from the sales.

Yes, I remember G. Maffei saying that the extra cash that ended up at Ventures was the result of turning EXPE and TRIP into liquidity (paraphrasing).  It would be important in that case not to double-count the shares as claimed in the S-4 AND the extra cash.  I didn't mark my valuation up by $300m once I heard that Ventures was splitoff with $1.6bn cash vice $1.3bn. 

Also, it will be interesting how they treat the gain on sale as they sell those off - it may give us some insight as to how/if they are able to shield some of those capital gains.  I am a bit torn how to treat taxes on Ventures' current holdings as well as the DTLs.  For the sake of conservatism, I like the liquidation valuation you have done.  I do get the feeling that it is a bit draconian.  (And it is only a feeling - I back it up with no real evidence.)  I will be the first to admit they I do not have enough tax expertise nor visibility into the actual instruments (debentures, derivatives, et al.) to really pin down a good estimate.

Given the nature of Lvnta collection of assets, is that a collection that people would want to own, or have to own? I would say neither. It's structured in a way to make people not want to deal with it.

Given that it was spun off in early august into a dull market with little fanfare and zero media attention, is that more likely to produce a security that is fairly valued or undervalued? I would guess undervalued.

Given the size of the company (small cap) and the small number of shares outstanding, and people not wanting to mess with a rights offering, does that make it more or less likely that larger institutions would sell lvnta or hold it or buy it? I would guess Sell it.

Given that there are no sell side analysts really sponsoring this thing with very little incentive to do so, does that make it more likely it would be undervalued or fairly valued? I would say undervalued.

All good observations, and I think you have pinpointed the reasons why we oddballs are looking into it!  Qualitatively, this has all the attributes of a great opportunity.  It would be nice if we could have the same quantitative confidence. 
Title: Re: LVNTA - Liberty Ventures
Post by: ItsAValueTrap on August 18, 2012, 11:31:59 PM
Amazon:  It looks like technically they had negative free cash flow (profit + D&A - capex).  But without the impairment they would have had positive free cash flow.  Though it's definitely interesting to note that their profits aren't that great.

The DTLs at LVNTA:  I guess this is something I struggled with.
1- What is the correct discount rate for the tax liabilities?
2- When do the DTLs expire?
Both 1 and 2 are inter-related.  If you can be certain that the DTLs won't expire early/prematurely then they are worth more.

I guess you can see the DTLs as a form of debt.  How good a form of debt is it?
a- No covenants... unlike the exchangeable debentures or QVC debt.
b- Limits ability to liquidate assets if you want to keep the DTL loan/"debt".  Though there are tax efficient ways of "selling" assets.
c- No interest

On second thought, maybe you should apply a discount rate of 7-8% to some of the deferred tax liabilities... maybe even a little higher.  You could make the argument that it is similar in risk to the other kinds of debt that Liberty takes on (which have interest rates in that 7-8% range).

The comparable yield on some of the exchangeable debentures is a little over 9%.

---
Breaking it down asset by asset:

Trip:  DTLs not worth much if Ventures will liquidate the Trip stake quickly.  Liberty outright sold some Trip shares in the open market.
Expe:  Same idea.  I think Ventures will work hard on liquidating these stakes in a more tax efficient manner, like the forward sale on Expe shares.  BUT, these stakes are very large and it will be hard to buy derivatives (or sell convertible debentures) for such large stakes.

Time Warner:  The shares probably won't be liquidated for a while.  The exchangeable debentures can be settled in cash.
Time Warner Exchangeable debentures:  Will likely be settled several years from now.  I don't think that they will be put early.

Sprint exchangeables:  Ventures may buy a little bit of them back early.  I don't think the liquidity exists to buy all of this series back.

Motorola exchangeables:  I don't see these being bought back unless their price drops a lot (which is good for Ventures anyways).  I don't see the put or call feature being exercised early.

Tax liabilities from debt repurchases in the past:  These will be due in a few/several years.

---
I guess if you break it down that way, then I might be underestimating the discount that should be applied to the DTLs by a lot.

A lot of them won't be due for a while and I should probably use a higher discount rate.
Title: Re: LVNTA - Liberty Ventures
Post by: Olmsted on September 12, 2012, 09:24:50 AM
For those still watching, the terms of the rights offering was set Friday with exercise price at $35.99, expiring 9 October.  The rights are trading today with the ticker LVNAR.  The arbitrageurs are all over this, nailing the spread between rights and LVNTA pretty closely. 

There is an opportunity to oversubscribe.  It looks like the market is anticipating all rights will be exercised, and there will be no oversubscription.  If you think otherwise, there might be an arbitrage opportunity in the rights at this moment (i.e. sell common short, buy equal number of rights, oversubscribe - and if you get an overallotment it's pure profit).  Not my game though.


http://ir.libertyinteractive.com/releasedetail.cfm?ReleaseID=705705
Title: Re: LVNTA - Liberty Ventures
Post by: no_free_lunch on August 18, 2013, 07:21:48 AM
Sumzero had a write-up on LINTA.  The analyst thinks it could hit $38 (or 70%+) in next 2 years.

https://sumzero.com/headlines/consumers_and_retailing/LINTA/188-liberty-interactive-misunderstood-qvc-assets-mask-growing-upside

I spent a few hours on it and am just not as convinced as the author but I thought it was worth posting.  The company's growth rates are okay but nothing special.  I compared the valuation to traditional retailers and the valuation doesn't seem particularly cheap, sure it could go up 20-30% but I don't see any reason it would.   The only real positive I see is malone's involvement and the possibility for QVC expansion overseas.
Title: Re: LVNTA - Liberty Ventures
Post by: ItsAValueTrap on January 04, 2014, 11:52:39 PM
I don't know if anybody is still interested in this stock, but this website explains the tax benefits of green investments:
http://www.woodlawnassociates.com/tax-equity-101/

I don't know if Ventures is pursuing those types of deals.
Title: Re: LVNTA - Liberty Ventures
Post by: jay21 on May 13, 2014, 06:13:25 PM
S-1: http://www.sec.gov/Archives/edgar/data/1606745/000104746914004609/a2220025zs-1.htm

"Q:
What transactions are occurring in connection with the Spin-Off other than those involved in the internal restructuring?

A:
In connection with the Spin-Off, a bankruptcy remote wholly-owned subsidiary of TripCo (TripSPV) intends to borrow up to $400 million in cash in margin loans (the Margin Loans), secured by our ownership interest in TripAdvisor, which will be held through TripSPV, and guaranteed by our company, from one or more third parties (the proceeds from such borrowing, the Loan Proceeds). As part of the internal restructuring, approximately $350 million of the Loan Proceeds will be distributed from TripCo to Liberty, and Liberty, within twelve months following the completion of the Spin-Off, will use all of the distributed portion of the Loan Proceeds received from TripCo to repurchase shares of Liberty common stock under its share repurchase program pursuant to a special authorization by Liberty's board of directors. See "Description of Certain Indebtedness."

"In 2012, Liberty recapitalized its common stock into two new tracking stocks: the Liberty Interactive Group and the Liberty Ventures Group, for the purpose of creating greater transparency for the assets and liabilities attributed to each group, among other reasons. Although the public markets have responded favorably to these two tracking stocks, Liberty believes that a meaningful trading discount continues to apply to the underlying value of the businesses and assets attributed to its Ventures Group. Liberty believes that the Spin-Off will result in a higher aggregate trading value for our common stock and the Liberty Ventures common stock as compared to the trading price of Liberty Ventures common stock without the Spin-Off. The asset-backed nature of our stock is expected to provide greater transparency for investors with respect to our dominant business, our investment in TripAdvisor, which should result in greater focus and attention by the investment community on this business. The Spin-Off is also expected to enhance our ability to issue equity for strategic acquisitions and other business combinations by creating a more efficiently priced equity security and enable us to more effectively tailor equity incentives for our management and employees with less dilution to public stockholders. In addition, Liberty believes that separating our company from Liberty's other businesses will help facilitate a potential combination of our company with TripAdvisor by eliminating any negotiations regarding the valuation of Liberty's other businesses, thereby making it more likely that a potential agreement could be reached. Liberty believes that a combination of our company with TripAdvisor could be beneficial for our stockholders, on the one hand, and TripAdvisor, on the other hand, by eliminating the control of a large stockholder and the overhang associated with the current dual-public company structure. No assurance can be given that any investment, acquisition or other strategic opportunities will become available following the Spin-Off on terms that TripCo finds favorable or at all, nor can any assurance be given that a combination of TripCo and TripAdvisor will ever occur."
Title: Re: LVNTA - Liberty Ventures
Post by: Yours Truly on May 13, 2014, 08:51:19 PM
It seems like we are back in 2012 again buy this time there is much more to choose from within the Malone empire of special situations!

It looks like both LINTA and LVNTA did real well after the split posting close to 1-bagger and a 2-3 bagger respectively in 1.5 years.
Title: Re: LVNTA - Liberty Ventures
Post by: ItsAValueTrap on May 13, 2014, 09:15:07 PM
It seems like LVNTA did quite well due to TRIP.  If you plot the two stocks against each other on Google, they line up pretty well.

I didn't understand that the green energy tax breaks are really good deals for companies that throw off a steady stream of cash.  Apparently they have equity-like IRRs without equity-like risk.
Apparently a lot of companies avoid tax equity because they have to take risk in green energy projects, otherwise the tax breaks won't work.  So they have to understand an industry they know little about.  (??)
Title: Re: LVNTA - Liberty Ventures
Post by: ItsAValueTrap on May 13, 2014, 09:35:16 PM
Here is Malone selling LINTA and LVNTA shares:
http://www.sec.gov/Archives/edgar/data/937797/000122520813017672/xslF345X03/doc4.xml

August 8, 2013
sold about $7.8M in LINTA
sold about $5.1M in LVNTA
Title: Re: LVNTA - Liberty Ventures
Post by: Yours Truly on May 14, 2014, 04:25:17 AM
Here is Malone selling LINTA and LVNTA shares:
http://www.sec.gov/Archives/edgar/data/937797/000122520813017672/xslF345X03/doc4.xml

August 8, 2013
sold about $7.8M in LINTA
sold about $5.1M in LVNTA

How much as a % of overall shares owned by Malone does that represent?
Title: Re: LVNTA - Liberty Ventures
Post by: ItsAValueTrap on August 13, 2014, 01:22:28 PM
Date for Ventures / TripAdvisor spinoff announced.

persons acquiring shares of Liberty Ventures common stock in the market through August 27, 2014 will still receive shares of TripAdvisor Holdings common stock in the Distribution

Quote
August 11, 2014
Liberty Announces Record and Distribution Date and Symbol Information for Spin-off of Liberty TripAdvisor Holdings
ENGLEWOOD, Colo.--Liberty Interactive Corporation (“Liberty”) (Nasdaq: LINTA, LINTB, LVNTA, LVNTB), announced today that, in connection with its upcoming spin-off (the “Spin-off”) of its subsidiary Liberty TripAdvisor Holdings, Inc. (“TripAdvisor Holdings”), its Board of Directors has declared a record date of 5:00 p.m., New York City time, on August 21, 2014 (such date and time, the “record date”) and a distribution date of 5:00 p.m., New York City time, on August 27, 2014 for the distribution, by means of a dividend, of shares of TripAdvisor Holdings common stock to effect the Spin-off. In the Spin-off, Liberty will distribute (the “Distribution”) one share of TripAdvisor Holdings Series A and Series B common stock for each share of the corresponding series of Liberty Ventures common stock held as of the record date. However, because Nasdaq has established August 28, 2014 as the ex-dividend date of the Distribution, and as a result of related “due bill” trading procedures, persons acquiring shares of Liberty Ventures common stock in the market through August 27, 2014 will still receive shares of TripAdvisor Holdings common stock in the Distribution. Liberty expects that the TripAdvisor Holdings Series A and Series B common stock will begin trading in the regular way on the Nasdaq Global Select Market under the symbols “LTRPA” and “LTRPB” beginning on August 28, 2014. Following the Spin-off, TripAdvisor Holdings will hold Liberty’s 22% economic and 57% voting interest in TripAdvisor, Inc., its BuySeasons business, corporate level cash and cash equivalents of $50 million and $400 million in indebtedness. The completion of the Spin-off remains subject to the satisfaction or waiver, as applicable, of a number of conditions.
Title: Re: LVNTA - Liberty Ventures
Post by: Chalk bag on August 13, 2014, 03:47:59 PM
Date for Ventures / TripAdvisor spinoff announced.

persons acquiring shares of Liberty Ventures common stock in the market through August 27, 2014 will still receive shares of TripAdvisor Holdings common stock in the Distribution

Quote
August 11, 2014
Liberty Announces Record and Distribution Date and Symbol Information for Spin-off of Liberty TripAdvisor Holdings
ENGLEWOOD, Colo.--Liberty Interactive Corporation (“Liberty”) (Nasdaq: LINTA, LINTB, LVNTA, LVNTB), announced today that, in connection with its upcoming spin-off (the “Spin-off”) of its subsidiary Liberty TripAdvisor Holdings, Inc. (“TripAdvisor Holdings”), its Board of Directors has declared a record date of 5:00 p.m., New York City time, on August 21, 2014 (such date and time, the “record date”) and a distribution date of 5:00 p.m., New York City time, on August 27, 2014 for the distribution, by means of a dividend, of shares of TripAdvisor Holdings common stock to effect the Spin-off. In the Spin-off, Liberty will distribute (the “Distribution”) one share of TripAdvisor Holdings Series A and Series B common stock for each share of the corresponding series of Liberty Ventures common stock held as of the record date. However, because Nasdaq has established August 28, 2014 as the ex-dividend date of the Distribution, and as a result of related “due bill” trading procedures, persons acquiring shares of Liberty Ventures common stock in the market through August 27, 2014 will still receive shares of TripAdvisor Holdings common stock in the Distribution. Liberty expects that the TripAdvisor Holdings Series A and Series B common stock will begin trading in the regular way on the Nasdaq Global Select Market under the symbols “LTRPA” and “LTRPB” beginning on August 28, 2014. Following the Spin-off, TripAdvisor Holdings will hold Liberty’s 22% economic and 57% voting interest in TripAdvisor, Inc., its BuySeasons business, corporate level cash and cash equivalents of $50 million and $400 million in indebtedness. The completion of the Spin-off remains subject to the satisfaction or waiver, as applicable, of a number of conditions.

Glenn -- any view on Malone's plan & potential discount w/ the remaining EXPE stakes? I've heard many theses on it getting rolled back into LINTA, have not heard anything about it trading at a wider discount as it does. Based on many conversations, it's also to my belief that the LTRPA discount to TRIP should be somewhere around -10 to 5% on the get-go. What do you think?
Title: Re: LVNTA - Liberty Ventures
Post by: thefatbaboon on August 13, 2014, 10:07:11 PM
Date for Ventures / TripAdvisor spinoff announced.

persons acquiring shares of Liberty Ventures common stock in the market through August 27, 2014 will still receive shares of TripAdvisor Holdings common stock in the Distribution

Quote
August 11, 2014
Liberty Announces Record and Distribution Date and Symbol Information for Spin-off of Liberty TripAdvisor Holdings
ENGLEWOOD, Colo.--Liberty Interactive Corporation (“Liberty”) (Nasdaq: LINTA, LINTB, LVNTA, LVNTB), announced today that, in connection with its upcoming spin-off (the “Spin-off”) of its subsidiary Liberty TripAdvisor Holdings, Inc. (“TripAdvisor Holdings”), its Board of Directors has declared a record date of 5:00 p.m., New York City time, on August 21, 2014 (such date and time, the “record date”) and a distribution date of 5:00 p.m., New York City time, on August 27, 2014 for the distribution, by means of a dividend, of shares of TripAdvisor Holdings common stock to effect the Spin-off. In the Spin-off, Liberty will distribute (the “Distribution”) one share of TripAdvisor Holdings Series A and Series B common stock for each share of the corresponding series of Liberty Ventures common stock held as of the record date. However, because Nasdaq has established August 28, 2014 as the ex-dividend date of the Distribution, and as a result of related “due bill” trading procedures, persons acquiring shares of Liberty Ventures common stock in the market through August 27, 2014 will still receive shares of TripAdvisor Holdings common stock in the Distribution. Liberty expects that the TripAdvisor Holdings Series A and Series B common stock will begin trading in the regular way on the Nasdaq Global Select Market under the symbols “LTRPA” and “LTRPB” beginning on August 28, 2014. Following the Spin-off, TripAdvisor Holdings will hold Liberty’s 22% economic and 57% voting interest in TripAdvisor, Inc., its BuySeasons business, corporate level cash and cash equivalents of $50 million and $400 million in indebtedness. The completion of the Spin-off remains subject to the satisfaction or waiver, as applicable, of a number of conditions.

Glenn -- any view on Malone's plan & potential discount w/ the remaining EXPE stakes? I've heard many theses on it getting rolled back into LINTA, have not heard anything about it trading at a wider discount as it does. Based on many conversations, it's also to my belief that the LTRPA discount to TRIP should be somewhere around -10 to 5% on the get-go. What do you think?

I've struggled with this one a bit.  Buyseasons is worthless.  The net margin loan will be -$350.  The shares are worth about $3bn.  BUT even though it is only 22% of TRIP the shares have 57% of the vote.

If there is no premium for control shares, or discount for holdco. then i would imagine there would be a discount to reflect the margin loan. But it is possible that the market gives a premium to holdco on account of the voting control.
Title: Re: LVNTA - Liberty Ventures
Post by: ItsAValueTrap on August 15, 2014, 08:54:00 PM
Glenn -- any view on Malone's plan & potential discount w/ the remaining EXPE stakes? I've heard many theses on it getting rolled back into LINTA, have not heard anything about it trading at a wider discount as it does. Based on many conversations, it's also to my belief that the LTRPA discount to TRIP should be somewhere around -10 to 5% on the get-go. What do you think?

I've put down my thoughts here:  http://glennchan.wordpress.com/2014/08/15/thoughts-on-lvnta-linta-ltrpa/

I haven't figured out if this deal is great for Ventures shareholders. 

Ventures is paying $350M to Interactive for BuySeasons and the ability to spin off TRIP.  That's a hefty price to pay?  I believe Malone owns more of Ventures than Interactive so he may have an incentive to benefit Ventures.
Title: Re: LVNTA - Liberty Ventures
Post by: thefatbaboon on August 15, 2014, 11:26:45 PM
Glenn -- any view on Malone's plan & potential discount w/ the remaining EXPE stakes? I've heard many theses on it getting rolled back into LINTA, have not heard anything about it trading at a wider discount as it does. Based on many conversations, it's also to my belief that the LTRPA discount to TRIP should be somewhere around -10 to 5% on the get-go. What do you think?

I've put down my thoughts here:  http://glennchan.wordpress.com/2014/08/15/thoughts-on-lvnta-linta-ltrpa/

I haven't figured out if this deal is great for Ventures shareholders. 

Ventures is paying $350M to Interactive for BuySeasons and the ability to spin off TRIP.  That's a hefty price to pay?  I believe Malone owns more of Ventures than Interactive so he may have an incentive to benefit Ventures.

Where have you read that Ventures is paying $350m to Linta for BuySeasons?  (I'm almost 100% certain that that is not what is happening.  $350m is being paid from TripCo to Ventures.)
Title: Re: LVNTA - Liberty Ventures
Post by: ItsAValueTrap on August 15, 2014, 11:44:27 PM
http://ir.libertyinteractive.com/releasedetail.cfm?ReleaseID=796097

Liberty announced that its board has also authorized management to pursue a plan to spin-off to holders of its Liberty Ventures Group tracking stock shares of a newly formed company to be called Liberty TripAdvisor Holdings ("Trip Holdings"). Trip Holdings would be comprised of, among other things, Liberty's 22% economic and 57% voting interest in TripAdvisor, as well as Liberty's BuySeasons business, which is currently a part of Liberty's subsidiary Celebrate Interactive, LLC ("Celebrate Interactive"). BuySeasons would be reattributed from the Liberty Interactive Group to the Liberty Ventures Group prior to the spin-off and cash equal to the fair market value of BuySeasons would be reattributed from the Liberty Ventures Group to the Liberty Interactive Group. The Evite business, also currently a part of Celebrate Interactive, would remain at Liberty attributed to the Liberty Interactive Group (or, assuming the completion of the recapitalization, the new Liberty Digital Commerce Group). In the spin-off, record holders of Series A and Series B Liberty Ventures common stock would receive 1 share of the corresponding series of Trip Holdings common stock for each share of the Liberty Ventures common stock held by them as of a to-be-determined record date.
Title: Re: LVNTA - Liberty Ventures
Post by: thefatbaboon on August 15, 2014, 11:58:38 PM
Yes - but that doesn't say what you think it does.
Title: Re: LVNTA - Liberty Ventures
Post by: ItsAValueTrap on August 16, 2014, 12:08:19 AM
http://www.sec.gov/Archives/edgar/data/1606745/000104746914004609/a2220025zs-1.htm

Quote
    The number of shares of the Registrant's proposed Series A common stock, par value $.01 per share ("LTRPA"), being registered has been determined based upon the number of shares of Liberty Interactive Corporation's ("Liberty") ....
Liberty = Liberty Interactive in the S-1 filing

Quote
Q:
    What transactions are occurring in connection with the Spin-Off other than those involved in the internal restructuring?

A:
    In connection with the Spin-Off, a bankruptcy remote wholly-owned subsidiary of TripCo (TripSPV) intends to borrow up to $400 million in cash in margin loans (the Margin Loans), secured by our ownership interest in TripAdvisor, which will be held through TripSPV, and guaranteed by our company, from one or more third parties (the proceeds from such borrowing, the Loan Proceeds). As part of the internal restructuring, approximately $350 million of the Loan Proceeds will be distributed from TripCo to Liberty, and Liberty, within twelve months following the completion of the Spin-Off, will use all of the distributed portion of the Loan Proceeds received from TripCo to repurchase shares of Liberty common stock under its share repurchase program pursuant to a special authorization by Liberty's board of directors. See "Description of Certain Indebtedness."

Title: Re: LVNTA - Liberty Ventures
Post by: thefatbaboon on August 16, 2014, 12:29:48 AM
http://www.sec.gov/Archives/edgar/data/1606745/000104746914004609/a2220025zs-1.htm

Quote
    The number of shares of the Registrant's proposed Series A common stock, par value $.01 per share ("LTRPA"), being registered has been determined based upon the number of shares of Liberty Interactive Corporation's ("Liberty") ....
Liberty = Liberty Interactive in the S-1 filing

NO.  It's referring to Liberty Ventures outstanding shares. 

Quote
Q:
    What transactions are occurring in connection with the Spin-Off other than those involved in the internal restructuring?

A:
    In connection with the Spin-Off, a bankruptcy remote wholly-owned subsidiary of TripCo (TripSPV) intends to borrow up to $400 million in cash in margin loans (the Margin Loans), secured by our ownership interest in TripAdvisor, which will be held through TripSPV, and guaranteed by our company, from one or more third parties (the proceeds from such borrowing, the Loan Proceeds). As part of the internal restructuring, approximately $350 million of the Loan Proceeds will be distributed from TripCo to Liberty, and Liberty, within twelve months following the completion of the Spin-Off, will use all of the distributed portion of the Loan Proceeds received from TripCo to repurchase shares of Liberty common stock under its share repurchase program pursuant to a special authorization by Liberty's board of directors. See "Description of Certain Indebtedness."

Again, it's not saying what you think it does.
Title: Re: LVNTA - Liberty Ventures
Post by: dwy000 on August 16, 2014, 09:37:05 AM
http://www.sec.gov/Archives/edgar/data/1606745/000104746914004609/a2220025zs-1.htm

Quote
    The number of shares of the Registrant's proposed Series A common stock, par value $.01 per share ("LTRPA"), being registered has been determined based upon the number of shares of Liberty Interactive Corporation's ("Liberty") ....
Liberty = Liberty Interactive in the S-1 filing

NO.  It's referring to Liberty Ventures outstanding shares. 

Quote
Q:
    What transactions are occurring in connection with the Spin-Off other than those involved in the internal restructuring?

A:
    In connection with the Spin-Off, a bankruptcy remote wholly-owned subsidiary of TripCo (TripSPV) intends to borrow up to $400 million in cash in margin loans (the Margin Loans), secured by our ownership interest in TripAdvisor, which will be held through TripSPV, and guaranteed by our company, from one or more third parties (the proceeds from such borrowing, the Loan Proceeds). As part of the internal restructuring, approximately $350 million of the Loan Proceeds will be distributed from TripCo to Liberty, and Liberty, within twelve months following the completion of the Spin-Off, will use all of the distributed portion of the Loan Proceeds received from TripCo to repurchase shares of Liberty common stock under its share repurchase program pursuant to a special authorization by Liberty's board of directors. See "Description of Certain Indebtedness."

Again, it's not saying what you think it does.

It gets to the same place at the end of the day - TripCo gets BuySeasons and $350M of cash (funded by the new debt at TripCo) moves back to LINTA.  Whether some part or all of the $350M is attributable to BuySeasons or the whole thing is a dividend back up doesn't really matter except for tax purposes (to which end I have full confidence the Liberty team will do whatever actions are required to minimize tax impact).
Title: Re: LVNTA - Liberty Ventures
Post by: ItsAValueTrap on August 16, 2014, 10:20:29 AM
NO.  It's referring to Liberty Ventures outstanding shares. 

Hmm.  Liberty refers to Liberty Interactive Corporation, which consists of both Liberty Interactive Group and Liberty Ventures Group.  So "Liberty" is ambiguous.  But whatever... the $350M is going to Liberty Interactive Group.

2- Reading the S-1 filing more carefully, if the QVC/eCommerce split happened first, then BuySeasons would move to QVC.  So the $350M presumably would end up at QVC.

So it seems like Malone anticipates that QVC would have better buyback potential than eCommerce.
Title: Re: LVNTA - Liberty Ventures
Post by: ItsAValueTrap on August 18, 2014, 01:41:56 PM
You know what... maybe I got it wrong.  LINTA filed a 8-K today:

http://www.sec.gov/Archives/edgar/data/1355096/000135509614000061/lint8-kbuyseasonsventuresg.htm
Quote
On August 15, 2014, Liberty Interactive Corporation (the “Issuer”) effected a change in attribution of (a) its subsidiary, BuySeasons, Inc., from the Liberty Interactive tracking stock group to the Liberty Ventures tracking stock group and (b) $25,000,000 in cash from the Liberty Ventures tracking stock group to the Liberty Interactive tracking stock group.  This change in attribution was effected in preparation for the Issuer’s previously announced spin-off of all of the capital stock of Liberty TripAdvisor Holdings, Inc., which is anticipated to occur on August 27, 2014, subject to the satisfaction or waiver of all conditions.
Title: Re: LVNTA - Liberty Ventures
Post by: guowei58 on September 24, 2014, 05:51:24 AM
what happens to the deferred tax liabilities related to the Exchangeable notes if Sprint, MSI or CTL were to be acquired for cash?  would these notes come due at face value, and then the DTL gets crystallized? 
Title: Re: LVNTA - Liberty Ventures
Post by: ItsAValueTrap on September 24, 2014, 06:05:59 AM
what happens to the deferred tax liabilities related to the Exchangeable notes if Sprint, MSI or CTL were to be acquired for cash?  would these notes come due at face value, and then the DTL gets crystallized?

IIRC the debentures get adjusted.  A lot of the stocks underlying the various debentures have already been taken over.
Title: Re: LVNTA - Liberty Ventures
Post by: guowei58 on September 24, 2014, 08:34:48 PM
what happens to the deferred tax liabilities related to the Exchangeable notes if Sprint, MSI or CTL were to be acquired for cash?  would these notes come due at face value, and then the DTL gets crystallized?

IIRC the debentures get adjusted.  A lot of the stocks underlying the various debentures have already been taken over.

When MMI was acquired for cash, LVNTA had to pay $110M of principal to the note holders.  Below is from the 2011 10-K:

Each $1,000 debenture of Liberty's 3.5% Exchangeable Senior Debentures (the "Motorola Exchangeables") is exchangeable at the holder's option for the value of 5.2598 shares of Motorola Solutions, Inc. and 4.6024 shares of Motorola Mobility Holdings, Inc., as a result of Motorola Inc.'s separation of Motorola Mobility Holdings, Inc. ("MMI") in a 1 for 8 stock distribution, and the subsequent 1 for 7 reverse stock split of Motorola, Inc. (which has been renamed Motorola Solutions, Inc. ("MSI")), effective January 4, 2011. Such exchange value is payable, at Liberty's option, in cash, MMI and MSI stock or a combination thereof. Liberty, at its option, may redeem the debentures, in whole or in part, for cash generally equal to the adjusted principal amount of the debentures plus accrued interest. As a result of a cash distribution made by Liberty in 2007 and principal payments made to holders of the Motorola Exchangeables, the adjusted principal amount of each $1,000 debenture is $809.90 , as of December 31, 2011 . Additionally, MMI is being acquired for cash which is a trigger for Liberty to repay a portion of the outstanding principal amount if the acquisition is completed. If the acquisition is completed it is estimated that Liberty would be required to make a cash payment of approximately $110 million toward the principal amount of the Motorola Exchangeables.



Title: Re: LVNTA - Liberty Ventures
Post by: guowei58 on September 25, 2014, 09:36:25 PM
http://www.sec.gov/Archives/edgar/data/1606745/000104746914004609/a2220025zs-1.htm

Quote
    The number of shares of the Registrant's proposed Series A common stock, par value $.01 per share ("LTRPA"), being registered has been determined based upon the number of shares of Liberty Interactive Corporation's ("Liberty") ....
Liberty = Liberty Interactive in the S-1 filing

NO.  It's referring to Liberty Ventures outstanding shares. 

Quote
Q:
    What transactions are occurring in connection with the Spin-Off other than those involved in the internal restructuring?

A:
    In connection with the Spin-Off, a bankruptcy remote wholly-owned subsidiary of TripCo (TripSPV) intends to borrow up to $400 million in cash in margin loans (the Margin Loans), secured by our ownership interest in TripAdvisor, which will be held through TripSPV, and guaranteed by our company, from one or more third parties (the proceeds from such borrowing, the Loan Proceeds). As part of the internal restructuring, approximately $350 million of the Loan Proceeds will be distributed from TripCo to Liberty, and Liberty, within twelve months following the completion of the Spin-Off, will use all of the distributed portion of the Loan Proceeds received from TripCo to repurchase shares of Liberty common stock under its share repurchase program pursuant to a special authorization by Liberty's board of directors. See "Description of Certain Indebtedness."

Again, it's not saying what you think it does.

It gets to the same place at the end of the day - TripCo gets BuySeasons and $350M of cash (funded by the new debt at TripCo) moves back to LINTA.  Whether some part or all of the $350M is attributable to BuySeasons or the whole thing is a dividend back up doesn't really matter except for tax purposes (to which end I have full confidence the Liberty team will do whatever actions are required to minimize tax impact).

Based on mgmt commentary on the 2Q call, it seems the $350M will be used to buy stock at LINTA.  But management is unclear on how this is accomplished since the $350M belongs to LVNTA shareholders (since TRIP was an attributed asset of LVNTA).

I think LINTA will provide LVNTA with a note or something to account for this value.  I can't find anything that would substantiate this claim, but it's the only thing that makes sense, or else LINTA shareholder gets $350M for free in the detriment of LVNTA shareholders. 


Title: Re: LVNTA - Liberty Ventures
Post by: Liberty on October 15, 2014, 02:32:11 PM
I'm suspecting a bunch of people here got some LVNTA stock today... How do you think about it? How do you value it?

It's been a while since I looked at Ventures..
Title: Re: LVNTA - Liberty Ventures
Post by: merkhet on October 16, 2014, 09:49:56 AM
Anyone looking at Liberty TripAdvisor here? It seems to be trading at a 15% discount to its TripAdvisor ownership vs. 9% when they were spun out in August.
Title: Re: LVNTA - Liberty Ventures
Post by: JoelS on October 18, 2014, 05:47:24 PM
On October 9 LVNTA added 650m to share repurchase authorization, in addition to the 350m which can be used for both LINTA and LVNTA.
Title: Re: LVNTA - Liberty Ventures
Post by: sriraja on October 23, 2014, 05:16:36 AM
A Good long talk by Greg on many Liberty companies including Ventures.

http://fora.tv/2014/10/09/Maximizing_Media_Returns_in_a_Time_of_Secular_Change
Title: Re: LVNTA - Liberty Ventures
Post by: dwy000 on October 28, 2014, 09:21:26 AM
Interesting comments from Wally Weitz on Malone's rationale for the converts in Liberty Ventures.

http://www8.gsb.columbia.edu/valueinvesting/sites/valueinvesting/files/Graham%20%26%20Doddsville_Issue%2022_Fall%202014.pdf
Title: Re: LVNTA - Liberty Ventures
Post by: Liberty on October 28, 2014, 11:25:14 AM
Interesting comments from Wally Weitz on Malone's rationale for the converts in Liberty Ventures.

http://www8.gsb.columbia.edu/valueinvesting/sites/valueinvesting/files/Graham%20%26%20Doddsville_Issue%2022_Fall%202014.pdf

Thanks. He also mentions Valeant and Transdigm, among others.
Title: Re: LVNTA - Liberty Ventures
Post by: Liberty on October 31, 2014, 10:52:46 AM
LVNTA has been on fire since I got my distribution from LINTA. Up almost 27% in less than a month.

Still no idea how to value it, but I'm holding on at least as long as there are buybacks.
Title: Re: LVNTA - Liberty Ventures
Post by: thefatbaboon on October 31, 2014, 11:26:03 AM
LVNTA has been on fire since I got my distribution from LINTA. Up almost 27% in less than a month.

Still no idea how to value it, but I'm holding on at least as long as there are buybacks.

I must have got a different LVNTA because mine isn't  >:(
Title: Re: LVNTA - Liberty Ventures
Post by: Liberty on October 31, 2014, 11:49:24 AM
LVNTA has been on fire since I got my distribution from LINTA. Up almost 27% in less than a month.

Still no idea how to value it, but I'm holding on at least as long as there are buybacks.

I must have got a different LVNTA because mine isn't  >:(

I might have messed up my post spin-off cost basis calculation. I used the exchange ratio, but now I realize it probably wasn't that simple...  Going to search for info on this later when I have time. How did you do it?
Title: Re: LVNTA - Liberty Ventures
Post by: thefatbaboon on October 31, 2014, 11:53:58 AM
LVNTA has been on fire since I got my distribution from LINTA. Up almost 27% in less than a month.

Still no idea how to value it, but I'm holding on at least as long as there are buybacks.

I must have got a different LVNTA because mine isn't  >:(

I did mine at the $36.5 that we were "paid" for our $1.5bn in dig assets and $1bn cash.  So, I figure I'm out of pocket!

I might have messed up my post spin-off cost basis calculation. I used the exchange ratio, but now I realize it probably wasn't that simple...  Going to search for info on this later when I have time. How did you do it?
Title: Re: LVNTA - Liberty Ventures
Post by: Liberty on October 31, 2014, 12:11:01 PM
Well look what I found:

http://libertyinteractive.com/stock-cost-basis.aspx
Title: Re: LVNTA - Liberty Ventures
Post by: thefatbaboon on October 31, 2014, 12:16:14 PM
Well look what I found:

http://libertyinteractive.com/stock-cost-basis.aspx

I'm not sure what basis has to do with it.  We bought x LVNTA shares at $36.50 for which we paid $1bn cash and various digital commerce assets valued at $1.5bn.

Title: Re: LVNTA - Liberty Ventures
Post by: Liberty on October 31, 2014, 12:41:16 PM
Well look what I found:

http://libertyinteractive.com/stock-cost-basis.aspx

I'm not sure what basis has to do with it.  We bought x LVNTA shares at $36.50 for which we paid $1bn cash and various digital commerce assets valued at $1.5bn.

Are we talking about two different things? I'm talking about adjusting my cost basis for both QVCA and LVNTA for the purpose of capital gain calculation for taxes and such.

The actual economic interest that was purchased can be different from that, of course.
Title: Re: LVNTA - Liberty Ventures
Post by: thefatbaboon on October 31, 2014, 12:57:24 PM
Well look what I found:

http://libertyinteractive.com/stock-cost-basis.aspx

I'm not sure what basis has to do with it.  We bought x LVNTA shares at $36.50 for which we paid $1bn cash and various digital commerce assets valued at $1.5bn.

Are we talking about two different things? I'm talking about adjusting my cost basis for both QVCA and LVNTA for the purpose of capital gain calculation for taxes and such.

The actual economic interest that was purchased can be different from that, of course.

Ah!  Ok, my mistake, I thought you were talking about how much we've made on the dividended shares since the dividend.
Title: Re: LVNTA - Liberty Ventures
Post by: Liberty on October 31, 2014, 01:04:31 PM
Ah!  Ok, my mistake, I thought you were talking about how much we've made on the dividended shares since the dividend.

That makes sense. No worries.
Title: Re: LVNTA - Liberty Ventures
Post by: merkhet on January 05, 2015, 12:46:37 PM
Anyone looking at LVNTA here?
Title: Re: LVNTA - Liberty Ventures
Post by: 100 Shares on January 05, 2015, 03:04:48 PM
I have. Couldn't really find much besides the information in the Investor Day presentation.
Title: Re: LVNTA - Liberty Ventures
Post by: Picasso on January 15, 2015, 10:24:15 PM
Does anyone still have a copy of the interview with Maffei on Fora.tv?  He made some comments on TripAdvisor that I was trying to reference but the video was taken down.
Title: Re: LVNTA - Liberty Ventures
Post by: jgyetzer on May 31, 2015, 07:17:29 AM
Had there been any clarification as to exactly what LVNTA gets in exchange for its $2.4B?
Title: Re: LVNTA - Liberty Ventures
Post by: ItsAValueTrap on May 31, 2015, 10:36:21 AM
Had there been any clarification as to exactly what LVNTA gets in exchange for its $2.4B?

Non-voting class C shares of Liberty Broadband...  LBRDK.
http://ir.libertyinteractive.com/releasedetail.cfm?ReleaseID=914705

And then Ventures swaps TWC shares with Broadband.  Ventures receives class A Broadband shares.

Quote
Liberty Interactive Corporation Announces Agreement with Liberty Broadband to Invest $2.4 billion in Support of Charter-Time Warner Cable Merger

ENGLEWOOD, Colo.--(BUSINESS WIRE)-- Liberty Interactive Corporation (NASDAQ: QVCA, QVCB, LNVTA, LVNTB) ("Liberty Interactive") today announced that it has entered into an agreement with Liberty Broadband Corporation (NASDAQ: LBRDA, LBRDK) ("Liberty Broadband") whereby Liberty Interactive will invest $2.4 billion in Liberty Broadband in connection with (and contingent upon) the closing of today's announced proposed merger of Charter Communications, Inc. ("Charter") and Time Warner Cable Inc. ("TWC"). The proceeds of this investment will be used by Liberty Broadband to fund, in part, its agreement to acquire $4.3 billion of Charter stock. Liberty Broadband's acquisition will be made in support of (and contingent upon) the closing of the Charter-TWC merger. In connection with these transactions, it is expected that Charter will undergo a corporate reorganization, resulting in a current subsidiary of Charter becoming the publicly traded parent company ("New Charter"). Liberty Interactive's investment in Liberty Broadband will be funded using cash on hand and will be attributed to the Liberty Ventures Group.

"We are excited for Liberty Interactive to make this attractive investment in Liberty Broadband, providing our shareholders with the unique opportunity to realize value from the proposed consolidation in the cable industry announced today by Charter," said Greg Maffei, President and CEO of Liberty Interactive. "Through this transaction, Liberty Interactive has the ability to deploy a significant amount of capital and become a meaningful shareholder of Liberty Broadband."

Liberty Interactive (along with third party investors, all of whom will invest on the same terms as Liberty Interactive) will purchase newly issued shares of Liberty Broadband Series C common stock (the "Series C Shares") at a per share price of $56.23 (equal to Liberty Broadband's net asset value on a sum-of-the parts basis). In the aggregate, Liberty Broadband has entered into subscription agreements with respect to $4.4 billion of its Series C Shares. Liberty Interactive's investment in Liberty Broadband is subject to customary closing conditions and funding will only occur upon the completion of the Charter-TWC merger. Liberty Broadband intends to seek stockholder approval for the issuance of the Series C Shares in accordance with the rules and requirements of the Nasdaq Stock Market. If, for any reason, Liberty Broadband does not receive the requisite stockholder approval for the issuance of the Series C Shares, the purchasers will instead acquire a limited number of Series C Shares, together with shares of a newly issued series of non-convertible preferred stock of Liberty Broadband.

Liberty Broadband and Liberty Interactive have also entered into an agreement with Charter which provides that Liberty Broadband and Liberty Interactive will exchange, in a tax-free transaction, the shares of TWC common stock held by each company for shares of New Charter Class A common stock (subject to certain limitations). In addition, Liberty Interactive has also agreed to grant Liberty Broadband a proxy over the shares of New Charter stock it receives in the exchange, along with a right of first refusal with respect to the underlying New Charter stock.
Title: Re: LVNTA - Liberty Ventures
Post by: buylowersellhigh on May 31, 2015, 01:39:11 PM
Anyone looking at Liberty TripAdvisor here? It seems to be trading at a 15% discount to its TripAdvisor ownership vs. 9% when they were spun out in August.

I am curious myself on what is best way to gain a stake in TRIP.  What are the drawbacks of LTRPA?
Title: Re: LVNTA - Liberty Ventures
Post by: investor-man on June 01, 2015, 06:57:11 PM
Looks like CommerceHub is going to run the Google "Buy Button".  I reckon CommerceHub could be a big deal!

http://www.marketwatch.com/story/commercehub-and-yankee-candle-headline-google-session-at-the-2015-internet-retailer-conference-exhibition-irce-2015-06-01
Title: Re: LVNTA - Liberty Ventures
Post by: folivera13 on June 02, 2015, 08:23:44 AM
ItsAValueTrap just to clarify: I might have missed this but where does it say that "...Ventures swaps TWC shares with Broadband.  Ventures receives class A Broadband shares."  I thought Ventures would grant Broadband proxy on the CHTR shares Ventures receives as well as RFR. Also I thought Ventures purchased Class C Broadband shares with the PE partners and does not receive Class A.
Title: Re: LVNTA - Liberty Ventures
Post by: scorpioncapital on September 07, 2015, 04:25:43 PM
There's a good writeup on Liberty Ventures dated July 20 - http://valueinvestorsclub.com/idea/LIBERTY_VENTURES/137022

Title: Re: LVNTA - Liberty Ventures
Post by: thefatbaboon on November 05, 2015, 04:55:43 PM
Anyone on here doing the long/short Lvnta/expe?

Title: Re: LVNTA - Liberty Ventures
Post by: yitech on November 05, 2015, 06:32:59 PM
Anyone on here doing the long/short Lvnta/expe?

I am. But I increased LVNTA to EXPE exposure (or reduced EXPE short) from 1:1 (long 1 LVNTA, short 0.167 EXPE) to 2:1 since EXPE seems like the faster grower here than LBRDK and it felt kind of silly to hedge it away in hindsight.
Title: Re: LVNTA - Liberty Ventures
Post by: thefatbaboon on November 05, 2015, 06:51:46 PM
At what price expe did you make the adjustment?

Have you considered going in the other direction? Shorting chtr as well as shorting expe?  There's about $40 of chtr and expe in each share of Lvnta. Paying 2 bucks for the rest of Lvnta seems a hell of a discount.

Or a modification of that: say shorts of 75% of chtr and expe.  If you want to give up some discount for a better quality more diversified portfolio (ie including chtr and expe alongside ccommerce bodybuilding cash etc)
Title: Re: LVNTA - Liberty Ventures
Post by: yitech on November 05, 2015, 07:23:51 PM
At what price expe did you make the adjustment?

Have you considered going in the other direction? Shorting chtr as well as shorting expe?  There's about $40 of chtr and expe in each share of Lvnta. Paying 2 bucks for the rest of Lvnta seems a hell of a discount.

Or a modification of that: say shorts of 75% of chtr and expe.  If you want to give up some discount for a better quality more diversified portfolio (ie including chtr and expe alongside ccommerce bodybuilding cash etc)

I gradually adjusted the ratio since about a month ago. Loss from EXPE more than overwhelmed the gain from LVNTA. For some reason, market doesn't seem to discount tax-efficient spin-off of EXPE to holders.

Hard to decide how much short for CHTR as they may increase ownership of LBRDK to facilitate TWC-CHTR merger contingent on merger closing. CHTR seems to be a more stable FCF generator once they slow down growth capEx. Also, some smart fund managers have been adding CHTR. i.e. Berkshire and Lone Pine. So I don't want to be on the other side of their trades. Eventual merger of LBRDK and CHTR is highly likely in 4-5 years or more, which would further narrow the NAV discount.  And shorting both would require too much collateral upfront. As well, you will likely need to be quite patient until the IPOs of the rest of the e-commerce divisions unlock the value of those.

Title: Re: LVNTA - Liberty Ventures
Post by: frommi on November 10, 2015, 11:24:48 AM
Really interesting that people talk pages over pages over something like IBM or VRX, but ignore something where you can buy a true compounder with excellent management/capital allocation for 40-50% of its market price with catalysts 1-2 years out. What am i missing or is holding you guys back?
Title: Re: LVNTA - Liberty Ventures
Post by: ItsAValueTrap on November 10, 2015, 11:28:06 AM
If LVNTA were trading below NAV, Malone would buy back shares.

I don't believe LVNTA is buying back shares.
Title: Re: LVNTA - Liberty Ventures
Post by: frommi on November 10, 2015, 11:40:10 AM
If LVNTA were trading below NAV, Malone would buy back shares.

I don't believe LVNTA is buying back shares.

But this implies that EXPE is not tax efficient distributed/sold. Ok thats a risk, but i have zero downside for that scenario.
And why then has the discount grown that much in the past weeks/months?

Quote
ENGLEWOOD, Colo.--(BUSINESS WIRE)-- Liberty Interactive Corporation (QVCA) (Liberty Interactive) (Nasdaq: QVCA, QVCB, LVNTA, LVNTB) today announced that its board has authorized management to pursue the spin-offs of two newly formed companies to be called CommerceHub, Inc. and Liberty Expedia Holdings, Inc. (Expedia Holdings) to holders of its Liberty Ventures Group stock (collectively, the Spin-Offs).

We are pleased to announce our plan to separately spin-off CommerceHub and Expedia Holdings, said Greg Maffei, President and CEO of Liberty Interactive. "We believe the Spin-Offs should unlock value for our Liberty Ventures shareholders in an efficient manner and increase focus on the remaining attributed assets of Liberty Ventures.
.......
The applicable record dates, distribution dates and distribution ratios for the Spin-Offs will be announced at a later date. Each of the Spin-Offs is intended to be tax-free to stockholders of Liberty Ventures and will be subject to various conditions including the receipt of an opinion of tax counsel. Subject to the satisfaction of the applicable conditions, the completion of each of the Spin-Offs is expected to occur in the first half of 2016.

That was a fast reaction. :)
Title: Re: LVNTA - Liberty Ventures
Post by: Jurgis on November 10, 2015, 12:09:21 PM
Really interesting that people talk pages over pages over something like IBM or VRX, but ignore something where you can buy a true compounder with excellent management/capital allocation for 40-50% of its market price with catalysts 1-2 years out. What am i missing or is holding you guys back?

It is likely the complexity of analysis required.

I own some of various Liberties, but I would not be able to figure out LVNTA intrinsic value.
How do you even approach it? There are no SEC fillings for LVNTA. So I go to Liberty Interactive fillings ( http://www.sec.gov/Archives/edgar/data/1355096/000155837015002274/lint-20150930x10q.htm for example ) and there's nothing about LVNTA there either except for shares outstanding things... Head blows up. ;)

Edit: I guess you'd have to walk through this: http://finance.yahoo.com/news/liberty-interactive-corporation-reports-third-210500461.html
Why is this not in 10Q though?

Of course, that's what Malone intends with these trackers/etc.
Title: Re: LVNTA - Liberty Ventures
Post by: Jurgis on November 10, 2015, 01:00:44 PM
Just for fun. :)

Looking at http://valueinvestorsclub.com/idea/LIBERTY_VENTURES/137022 and http://finance.yahoo.com/news/liberty-interactive-corporation-reports-third-210500461.html I kinda understand the Liberty Ventures NAV table in VIC writeup. I probably would subtract 200M in DTA value and I would never value operating business at 12x-20x EBITDA (so here goes another 500M or so). This lowers discount to NAV to <10% (is market cap ~6B$ as Yahoo claims?).

I don't understand
Quote
Applying the full $10 / share discount to LBRDK implies you’re creating the stock for ~$20 / share, versus the current price of LBRDK at $54

Is he saying that the 20% to NAV discount is all allocated to LBRDK? This does not make much sense to me.
Well, also if I assume 5-10% discount to NAV, this is cut a lot.

Then this relies on CHTR being undervalued and revaluing up in the future. That's another can of worms.

Edit: Plus this requires either shorting EXPE or being fine with EXPE valuation - both of which might be issue for investors. I don't short and I don't think EXPE is cheap to hold.

So in short: this is complicated multi-step value proposition. If you believe all the parts are undervalued as author claims, then, yes, it's very attractive. If you don't, then not so much.

I think I'll stay with my nominal position.
I may be totally wrong though, since it's clearly not an easy stock to value.
Title: Re: LVNTA - Liberty Ventures
Post by: mevsemt on November 10, 2015, 02:00:54 PM
For LVNTA it's not just about the "static" valuation and discount to NAV, it's also about the structure... For example, let's say you have the following:

Assets: 120
Debt: 20
NAV: 100

Then one year later the assets have appreciated 10%:

Assets: 132
Debt: 20
NAV: 112

So, 10% appreciation in assets leads to 12% appreciation in NAV (of course it can go the other way as well).  Now, let's add another layer... assume the market cap is 80% of NAV (80), and assume that we're comfortable keeping our debt:assets ratio constant, with all incremental debt going to buybacks.

Assets: 120
Debt: 20
NAV: 100
MC: 80
Share Count: 100
PPS: .80

Then one year later:

Assets: 132
Debt: 22
NAV: 110
MC: 88
Share Count: 97.6
PPS: .90

So, we took on 2 of debt and used it to buyback stock at the average market cap (84), which means we retired about 2.4% of share outstanding.  In the end, our stock went from .80 to .90, giving us per share appreciation of 12.7% (vs. asset appreciation of only 10%), which is pretty powerful, especially if the underlying assets are appreciating at a faster pace...

Title: Re: LVNTA - Liberty Ventures
Post by: yitech on November 10, 2015, 02:37:13 PM
Really interesting that people talk pages over pages over something like IBM or VRX, but ignore something where you can buy a true compounder with excellent management/capital allocation for 40-50% of its market price with catalysts 1-2 years out. What am i missing or is holding you guys back?

Yeah. I think there is a complexity discount.. In this case, two layers of holding structure can be confusing. I used to skip anything Malone owns since it's too much work to see through the intricacies. And you don't have other superinvestors in this other than it is part of the Malone complex vs VRX or IBM.

Title: Re: LVNTA - Liberty Ventures
Post by: frommi on November 10, 2015, 09:11:14 PM
Just for fun. :)

http://finance.yahoo.com/news/liberty-interactive-corporation-reports-third-210500461.html I kinda understand the Liberty Ventures NAV table in VIC writeup. I probably would subtract 200M in DTA value and I would never value operating business at 12x-20x EBITDA (so here goes another 500M or so). This lowers discount to NAV to <10% (is market cap ~6B$ as Yahoo claims?).


The valuation matches how Liberty itself has valued the operating businesses in the balance sheet provided in http://finance.yahoo.com/news/liberty-interactive-corporation-reports-third-210500461.html (http://finance.yahoo.com/news/liberty-interactive-corporation-reports-third-210500461.html). The marketcap of LVNTA matches roughly the equity in this balance sheet, but in it there is Current deferred tax liabilities of 1,274. When you do the math that is >20% of the sum, so that matches the VIC writeup. Even if you assume that they only get around half of these taxes, thats still a 10% discount. When you hedge out EXPE the discount for the resulting stub doubles and LBRDK has a discount of around 10%, too. So this discount on discount is between 30-50% of the current CHTR price, dependend on how tax efficient they can distribute all the stuff.
Title: Re: LVNTA - Liberty Ventures
Post by: giofranchi on November 11, 2015, 12:18:43 AM
Really interesting that people talk pages over pages over something like IBM or VRX, but ignore something where you can buy a true compounder with excellent management/capital allocation for 40-50% of its market price with catalysts 1-2 years out. What am i missing or is holding you guys back?

Well, I have meaningful investments in LMCK, LBRDK, and LILAK... I think I have enough exposure to Malone's companies and that those three are a bit easier to understand than LVNTA.
That's the only reason why I don't follow LVNTA very closely. Otherwise, I would consider investing in it.

Cheers,

Gio
Title: Re: LVNTA - Liberty Ventures
Post by: frommi on November 12, 2015, 04:06:13 AM
If LVNTA were trading below NAV, Malone would buy back shares.

I don't believe LVNTA is buying back shares.

But this implies that EXPE is not tax efficient distributed/sold. Ok thats a risk, but i have zero downside for that scenario.
And why then has the discount grown that much in the past weeks/months?
Quote
ENGLEWOOD, Colo.--(BUSINESS WIRE)-- Liberty Interactive Corporation (QVCA) (Liberty Interactive) (Nasdaq: QVCA, QVCB, LVNTA, LVNTB) today announced that its board has authorized management to pursue the spin-offs of two newly formed companies to be called CommerceHub, Inc. and Liberty Expedia Holdings, Inc. (Expedia Holdings) to holders of its Liberty Ventures Group stock (collectively, the Spin-Offs).

We are pleased to announce our plan to separately spin-off CommerceHub and Expedia Holdings, said Greg Maffei, President and CEO of Liberty Interactive. "We believe the Spin-Offs should unlock value for our Liberty Ventures shareholders in an efficient manner and increase focus on the remaining attributed assets of Liberty Ventures.
.......
The applicable record dates, distribution dates and distribution ratios for the Spin-Offs will be announced at a later date. Each of the Spin-Offs is intended to be tax-free to stockholders of Liberty Ventures and will be subject to various conditions including the receipt of an opinion of tax counsel. Subject to the satisfaction of the applicable conditions, the completion of each of the Spin-Offs is expected to occur in the first half of 2016.

That was a fast reaction. :)
Title: Re: LVNTA - Liberty Ventures
Post by: yitech on November 12, 2015, 04:44:29 AM
If LVNTA were trading below NAV, Malone would buy back shares.

I don't believe LVNTA is buying back shares.

But this implies that EXPE is not tax efficient distributed/sold. Ok thats a risk, but i have zero downside for that scenario.
And why then has the discount grown that much in the past weeks/months?
Quote
ENGLEWOOD, Colo.--(BUSINESS WIRE)-- Liberty Interactive Corporation (QVCA) (Liberty Interactive) (Nasdaq: QVCA, QVCB, LVNTA, LVNTB) today announced that its board has authorized management to pursue the spin-offs of two newly formed companies to be called CommerceHub, Inc. and Liberty Expedia Holdings, Inc. (Expedia Holdings) to holders of its Liberty Ventures Group stock (collectively, the Spin-Offs).

We are pleased to announce our plan to separately spin-off CommerceHub and Expedia Holdings, said Greg Maffei, President and CEO of Liberty Interactive. "We believe the Spin-Offs should unlock value for our Liberty Ventures shareholders in an efficient manner and increase focus on the remaining attributed assets of Liberty Ventures.
.......
The applicable record dates, distribution dates and distribution ratios for the Spin-Offs will be announced at a later date. Each of the Spin-Offs is intended to be tax-free to stockholders of Liberty Ventures and will be subject to various conditions including the receipt of an opinion of tax counsel. Subject to the satisfaction of the applicable conditions, the completion of each of the Spin-Offs is expected to occur in the first half of 2016.

That was a fast reaction. :)

Awesome news! Just entered this for a couple of months. Lucky me. Hopefully the price will reflect SOTPs.
Title: Re: LVNTA - Liberty Ventures
Post by: dwy000 on November 12, 2015, 08:19:35 AM
I wonder how they'll spin Expedia without having major tax consequences?  Don't they have to spin it out with some operating assets to avoid the capital gains taxes (much like Yahoo is facing with their spinout of Alibaba shares).

If Malone/Maffei are driving it, you know it's going to be very tax efficient - but curious as to exactly how.
Title: Re: LVNTA - Liberty Ventures
Post by: currygoat on November 12, 2015, 08:43:20 PM
They are packaging the Bodybuilding.com business along with Liberty Expedia Holdings.
Title: Re: LVNTA - Liberty Ventures
Post by: ZenaidaMacroura on November 12, 2015, 09:48:15 PM
They are packaging the Bodybuilding.com business along with Liberty Expedia Holdings.
Makes it easier to find hotels with gyms

http://i.imgur.com/q3XYKhm.jpg

On a more serious note, is that a natural pairing?  I can't figure out why they didn't originally put it with the other digital assets under the LMCA umbrella.  Small potatoes doesn't make a difference I guess...
Title: Re: LVNTA - Liberty Ventures
Post by: Liberty on November 13, 2015, 03:25:21 AM
They are packaging the Bodybuilding.com business along with Liberty Expedia Holdings.
Makes it easier to find hotels with gyms

http://i.imgur.com/q3XYKhm.jpg

On a more serious note, is that a natural pairing?  I can't figure out why they didn't originally put it with the other digital assets under the LMCA umbrella.  Small potatoes doesn't make a difference I guess...

I believe they needed an operating business for tax reasons, just like they put TruePosition in LBRDA.
Title: Re: LVNTA - Liberty Ventures
Post by: ZenaidaMacroura on November 13, 2015, 03:50:49 AM
They are packaging the Bodybuilding.com business along with Liberty Expedia Holdings.
Makes it easier to find hotels with gyms

http://i.imgur.com/q3XYKhm.jpg

On a more serious note, is that a natural pairing?  I can't figure out why they didn't originally put it with the other digital assets under the LMCA umbrella.  Small potatoes doesn't make a difference I guess...

I believe they needed an operating business for tax reasons, just like they put TruePosition in LBRDA.
Ah, thanks!  Makes sense.
Title: Re: LVNTA - Liberty Ventures
Post by: merkhet on November 13, 2015, 04:52:54 AM
They are packaging the Bodybuilding.com business along with Liberty Expedia Holdings.
Makes it easier to find hotels with gyms

http://i.imgur.com/q3XYKhm.jpg

On a more serious note, is that a natural pairing?  I can't figure out why they didn't originally put it with the other digital assets under the LMCA umbrella.  Small potatoes doesn't make a difference I guess...

I believe they needed an operating business for tax reasons, just like they put TruePosition in LBRDA.
Ah, thanks!  Makes sense.

I also wonder if they're getting all this stuff out as fast as possible before a Yahoo/Alibaba ruling screws them.
Title: Re: LVNTA - Liberty Ventures
Post by: giofranchi on November 13, 2015, 05:15:32 AM
I also wonder if they're getting all this stuff out as fast as possible before a Yahoo/Alibaba ruling screws them.

What do you mean? Could you elaborate a bit further?

Thank you,

Gio
Title: Re: LVNTA - Liberty Ventures
Post by: merkhet on November 13, 2015, 06:30:41 AM
When you spin off a holding company that basically just holds stock, it's not going to be tax-free. However, if you have an operating business in it, then it should qualify for tax-free status from the IRS. (Malone has used this in his playbook multiple times.)

Yahoo & Alibaba ran into some trouble over the last year with their plan to do exactly that because of the blatantness by which Yahoo was using the rule. (The subsidiary they're dumping into AliCo was literally called Yahoo Small Business.) They asked the IRS for a comfort ruling to say that it was okay, and the IRS said no, which caused a bit ruckus.

So now, the status of this stuff is a little bit up in the air, and I was wondering whether Malone is trying to get some stuff done before the IRS makes things more difficult if/when they deny tax free status to Yahoo's Alibaba spinoff.
Title: Re: LVNTA - Liberty Ventures
Post by: giofranchi on November 13, 2015, 06:43:14 AM
So now, the status of this stuff is a little bit up in the air, and I was wondering whether Malone is trying to get some stuff done before the IRS makes things more difficult if/when they deny tax free status to Yahoo's Alibaba spinoff.

Ok, now I have got it! ;)

Thank you,

Gio
Title: Re: LVNTA - Liberty Ventures
Post by: giofranchi on November 13, 2015, 07:54:16 AM
I have opened a position in Liberty Interactive too.
Between Liberty Media, Liberty Broadband, Liberty Global, and Liberty Interactive, the investment I have with Malone is my largest investment today.
If Malone gets richer in the next 5 years, I will probably get richer too. ;)

Cheers,

Gio
Title: Re: LVNTA - Liberty Ventures
Post by: yitech on November 13, 2015, 11:01:52 PM
When you spin off a holding company that basically just holds stock, it's not going to be tax-free. However, if you have an operating business in it, then it should qualify for tax-free status from the IRS. (Malone has used this in his playbook multiple times.)

Yahoo & Alibaba ran into some trouble over the last year with their plan to do exactly that because of the blatantness by which Yahoo was using the rule. (The subsidiary they're dumping into AliCo was literally called Yahoo Small Business.) They asked the IRS for a comfort ruling to say that it was okay, and the IRS said no, which caused a bit ruckus.

So now, the status of this stuff is a little bit up in the air, and I was wondering whether Malone is trying to get some stuff done before the IRS makes things more difficult if/when they deny tax free status to Yahoo's Alibaba spinoff.

When you said tax-free status for spinning off a holding company that basically just holds stock, do you mean no cash tax and the underlying stock would compound pre-tax with deferred capital gain tax still accruing until it is sold or taken over (i.e. by some other company or Expedia)?

I thought tax-free (cash tax and future tax liability) only applies to pure operating business spin-off.

I am still a bit confused in this area. Hopefully someone can enlighten me..
Title: Re: LVNTA - Liberty Ventures
Post by: merkhet on November 14, 2015, 05:52:57 AM
http://www.nytimes.com/2015/05/23/business/dealbook/yahoos-tricky-plan-for-tax-free-spinoff-of-alibaba-stock.html?_r=0
Title: Re: LVNTA - Liberty Ventures
Post by: scorpioncapital on February 05, 2016, 11:24:42 AM
Anybody looking at this at these prices?

Expedia is valued at roughly 12x free cash flow today.
It will be spun-off soon.

Charter investment via Ventures is only on a if-merger-occurs basis, otherwise it's just cash.

Looking at the writeup on VIC, it seems that at today's price, if you take everything else at roughly 1/2 the valuation in that report ( including Commerchub also to be spun off) and deduct the financing structure you get around $35 to $36 per share conservatively calculated vs current price of $34. The wildcard is Expedia.

Title: Re: LVNTA - Liberty Ventures
Post by: Foreign Tuffett on May 30, 2016, 08:07:27 PM
I just put the finishing touches on my Liberty Ventures model. Definitely seems to be about ~20% undervalued (more if you include Liberty Broadband's discount).

What I like about Ventures -- versus many other holding companies that trade at a discount -- is that it's exposed to quality operating businesses. Charter/Liberty Broadband, Expedia, Bodybuilding.com, CommerceHub, etc. are all quality businesses that should continue to gain in value over time.

The Liberty Expedia and CommerceHub spinoffs should help to unlock value.
Title: Re: LVNTA - Liberty Ventures
Post by: muscleman on May 31, 2016, 12:45:10 AM
How is the tax liability considered in your model? I find it hard to understand the tax liability if stocks like Expedia is eventually sold. Could you please help me with that?
Title: Re: LVNTA - Liberty Ventures
Post by: Foreign Tuffett on May 31, 2016, 09:44:05 AM
The plan is to spin off Liberty Ventures' interests in Expedia and Bodybuilding.com in a tax free spinoff later this year ("Liberty Expedia Holdings"). Expedia does pay dividends (roughly $22.6M based on the number of shares owned by Ventures) so there is tax liability there, but they are going to leverage up Liberty Expedia to the tune of $350M in a classic Malone interest payments tax shield.

Ventures' overall tax situation is insanely complicated due to (a) the tax credits generated by the green/alternative energy investments (b) the complex exchangeable notes that allow for tax deductions beyond cash coupon payments and (c) as tracking stocks within the Liberty Interactive parent, Ventures and QVC's financials are intertwined. QVC generates lots of taxable cash flow so -- insofar as I can tell -- the various tax credits and deductions mostly go towards offsetting its taxable income.

Basically I just tried to make very conservative assumptions in my model. I don't think there's enough disclosure in the 10K to model every part of Ventures down to the last dollar.

 

Title: Re: LVNTA - Liberty Ventures
Post by: muscleman on May 31, 2016, 12:05:33 PM
Thank you. I do understand that he will spin off Liberty Expedia, just like Liberty trip advisers. But what will happen after that? Liberty trip advisers deserves a discount due to the tax liability if they eventually sell the stocks. If they don't sell, then what's the plan next? Someone said after two years they can do a merger without tax issues. I never understood that. Could u please help me?
Title: Re: LVNTA - Liberty Ventures
Post by: scorpioncapital on May 31, 2016, 12:10:16 PM
1. Reduce, but not eliminate the discount to NAV by creating a stock that tracks just a single focused asset.
2. Allow existing shareholders of Liberty to decide whether to hold, reduce, or increase their exposure to Expedia. Obviously the increase option is not so hot as one can just buy Expedia (EXPE).

I conclude that the purpose of this is a small one-time revaluation plus the ability to jettison a larger, more mature, more consolidated investment holding. My view is hold or reduce but not immediately, maybe within a year or two. Spins are sometimes traumatic breaks creating a temporary opportunity in this age of liquidity and hyper-trading.

Title: Re: LVNTA - Liberty Ventures
Post by: jmp8822 on May 31, 2016, 12:34:10 PM
1. Reduce, but not eliminate the discount to NAV by creating a stock that tracks just a single focused asset.
2. Allow existing shareholders of Liberty to decide whether to hold, reduce, or increase their exposure to Expedia. Obviously the increase option is not so hot as one can just buy Expedia (EXPE).

I conclude that the purpose of this is a small one-time revaluation plus the ability to jettison a larger, more mature, more consolidated investment holding. My view is hold or reduce but not immediately, maybe within a year or two. Spins are sometimes traumatic breaks creating a temporary opportunity in this age of liquidity and hyper-trading.

Do you have a sense of what the Expedia tracker will trade at based on any previous examples? I.e. do you think it will trade at a 5-percent discount to NAV, or perhaps more like a 20-percent discount to the ~$17.50 NAV?
Title: Re: LVNTA - Liberty Ventures
Post by: scorpioncapital on May 31, 2016, 12:56:28 PM
I don't have much experience except that the confusion the first few days, weeks and even month could create opportunities. Look at a chart of SIRI vs LSXMA. The exchange was 1:1. I'm not sure they got exactly what they wanted yet in terms of narrowing the discount. 5% would be stellar. I feel these spins are more useful as tax-free ways for long-term investors to over time divest one division and add to another (which becomes smaller after the spin). They never tell you what they expect, but I always think of this as large, maturing businesses undergoing consolidation and the incubator parent that is left which will source new deals. Your return is the return of existing good businesses + reinvestment of new capital. The growth potential will be in the latter, while the former should be like investing in a larger dividend cash cow. Not sure they will ever tell you what is best to own as there is a different profile depending on the shareholder.
Title: Re: LVNTA - Liberty Ventures
Post by: Foreign Tuffett on May 31, 2016, 04:53:06 PM
Keep in mind also that Liberty Expedia, while it will only own to ~15.7% of Expedia's total share count, will control ~52.2% of the voting power as well as the right to appoint 20% of the board. There is an agreement with Barry Diller, Expedia's chairman, that will give him the right to vote's Malone's shares for a maximum of 18 months after the conclusion of the spinoff. While it will take some time to play out, I feel that any valuation gap between Expedia and Liberty Expedia will eventually close.


Liberty Expedia's S-1 is below if you feel like torturing yourself trying to make sense of all of it

https://www.sec.gov/Archives/edgar/data/1669600/000104746916011528/a2227946zs-1.htm#cm11101_selected_financial_data (https://www.sec.gov/Archives/edgar/data/1669600/000104746916011528/a2227946zs-1.htm#cm11101_selected_financial_data)
Title: Re: LVNTA - Liberty Ventures
Post by: muscleman on May 31, 2016, 11:21:21 PM
can someone please help me with the tax questions?
http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/general-tax-questions/

In order to understand why Liberty Expedia or Liberty trip should not trade at a discount, we have to understand capital gain tax issues here. They bought these shares at low prices and now there is a huge tax liability if they sell. You cannot ignore that when you calculate NAV, but I can not understand exactly how that is calculated.
Title: Re: LVNTA - Liberty Ventures
Post by: jmp8822 on June 01, 2016, 08:56:47 AM
can someone please help me with the tax questions?
http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/general-tax-questions/

In order to understand why Liberty Expedia or Liberty trip should not trade at a discount, we have to understand capital gain tax issues here. They bought these shares at low prices and now there is a huge tax liability if they sell. You cannot ignore that when you calculate NAV, but I can not understand exactly how that is calculated.

Maybe someone else can chime in here with more knowledge of John Malone's history with these types of situations, but I believe he has been able to eventually merge the trackers with the actual company without taxes. Disclaimer: I have zero examples or proof of this, but I think that's the idea.
Title: Re: LVNTA - Liberty Ventures
Post by: Foreign Tuffett on June 01, 2016, 01:58:10 PM
can someone please help me with the tax questions?
http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/general-tax-questions/

In order to understand why Liberty Expedia or Liberty trip should not trade at a discount, we have to understand capital gain tax issues here. They bought these shares at low prices and now there is a huge tax liability if they sell. You cannot ignore that when you calculate NAV, but I can not understand exactly how that is calculated.

Maybe someone else can chime in here with more knowledge of John Malone's history with these types of situations, but I believe he has been able to eventually merge the trackers with the actual company without taxes. Disclaimer: I have zero examples or proof of this, but I think that's the idea.

The only guarantee is that a "Liberty" company is never going to pay more taxes than absolutely necessary. The end game here isn't likely to be anything that makes the deferred tax liabilities come due. Instead it could be an exchange or trade of some kind, like when Berkshire acquired Duracell using shares of PG.   

I did a quick valuation of Liberty TripAdvisor, which is a closest comparable to the pro forma Liberty Expedia. It currently trades within 1% of the value of its stake in TRIP. This is assigning no value to its BuySeasons operating subsidiary.
Title: Re: LVNTA - Liberty Ventures
Post by: Jurgis on June 01, 2016, 02:23:07 PM
There is no exact date for the spinoff yet, correct?
Title: Re: LVNTA - Liberty Ventures
Post by: jmp8822 on June 01, 2016, 03:01:42 PM
There is no exact date for the spinoff yet, correct?

Not that I know of - a prior presentation said 1st half 2016. The initial S-1s have been filed for both companies, but there haven't been any amendments yet, which eventually will give the exact dates.
Title: Re: LVNTA - Liberty Ventures
Post by: namo on June 29, 2016, 12:32:03 AM
The spin-off of CommerceHub will take place on July 13th:
http://ir.libertyinteractive.com/releasedetail.cfm?ReleaseID=977458

No mention of the Expedia spin-off.
Title: Re: LVNTA - Liberty Ventures
Post by: scorpioncapital on July 22, 2016, 02:37:41 PM
CommerceHub has started trading today and it seems quite reasonably priced - if you exclude the egregious amount of stock option compensation which is so liked by tech companies it seems to be trading in the mid teens to last year's earnings and the growth rate is in the 20%+ per year range. This would seem to give it a PEG < 1.

Title: Re: LVNTA - Liberty Ventures
Post by: Foreign Tuffett on July 22, 2016, 04:22:54 PM
CommerceHub has started trading today and it seems quite reasonably priced - if you exclude the egregious amount of stock option compensation which is so liked by tech companies it seems to be trading in the mid teens to last year's earnings and the growth rate is in the 20%+ per year range. This would seem to give it a PEG < 1.

Where are you getting a quote for this? I don't think it starts trading regular way until this coming Monday (7/25)?
Title: Re: LVNTA - Liberty Ventures
Post by: scorpioncapital on July 22, 2016, 04:40:56 PM
CHIKV and CHIAV. However, I am not sure how this works, I presume these when issued symbols will convert to CHUBA and CHUBK on Monday immediately before the open?
https://www.google.com/finance?q=NASDAQ%3ACHIKV&ei=566SV9mgMcqbiAL746p4




Title: Re: LVNTA - Liberty Ventures
Post by: muscleman on July 22, 2016, 08:03:38 PM
CommerceHub has started trading today and it seems quite reasonably priced - if you exclude the egregious amount of stock option compensation which is so liked by tech companies it seems to be trading in the mid teens to last year's earnings and the growth rate is in the 20%+ per year range. This would seem to give it a PEG < 1.

May I ask you where you get the financials for CommerceHub please? I can't seem to find it.
Title: Re: LVNTA - Liberty Ventures
Post by: yitech on July 22, 2016, 08:49:53 PM
Commerce Hub S1
https://www.sec.gov/Archives/edgar/data/1665658/000104746916011805/a2227352zs-1.htm
Title: Re: LVNTA - Liberty Ventures
Post by: muscleman on July 23, 2016, 11:32:26 AM
I am not comfortable to exclude the stock compensation.
Note that they capitalize their software costs over 2-3 years. Amazon does that for 2 years. Google said it is expensed until product release and the capitalization cost is immaterial.




CommerceHub:
" Software Costs:    The Company capitalizes the cost of acquired software and payroll, payroll-related costs and third-party consulting fees incurred in developing and enhancing CommerceHub Solutions and related product offerings as internal use software. Software costs are amortized on a straight-line basis over two to three years. Amortization of capitalized software costs is included in cost of revenue within the consolidated statements of operations. Payroll and benefits associated with internally developed software capitalized during the years ended December 31, 2015 and 2014 approximated $6.5 million and $3.0 million, respectively."



Google:
"We expense software development costs, including costs to develop software products or the software component of products to be marketed to external users, before technological feasibility is reached. Technological feasibility is typically reached shortly before the release of such products and as a result, development costs that meet the criteria for capitalization were not material for the periods presented.
Software development costs also include costs to develop software to be used solely to meet internal needs and cloud based applications used to deliver our services. We capitalize development costs related to these software applications once the preliminary project stage is complete and it is probable that the project will be completed and the software will be used to perform the function intended. Costs capitalized for developing such software applications were not material for the periods presented."
Title: Re: LVNTA - Liberty Ventures
Post by: scorpioncapital on July 25, 2016, 08:57:48 AM
I agree. Liberty in the presentation slide did say they will compensate CommerceHub with a one time payment for the dilution due to the options outstanding. The dilution would be 12%, about 5 million shares.
Presumably this is at the strike price so I'm not sure how much of a compensation this is since the strikes are generally about 1/2 the current trading price. (http://files.shareholder.com/downloads/AMDA-GY7JI/2497376033x0x900960/083B6E37-EE1A-45BF-BA37-FC1049C41B6E/CommerceHub-Spinoff-Presentation-July-2016.pdf)

Also a bit weird that the A series is trading below the K series. If the world is just, this should flip.
Title: Re: LVNTA - Liberty Ventures
Post by: Jurgis on July 25, 2016, 09:11:49 AM
Also a bit weird that the A series is trading below the K series. If the world is just, this should flip.

A number of Liberty As are trading below Ks right now. It's mostly irrational, though some people try to explain it as a liquidity premium. I flip flop A's to K's couple times a year. Stopped posting it on CoBF since nobody seems to care.
Title: Re: LVNTA - Liberty Ventures
Post by: scorpioncapital on July 25, 2016, 09:24:20 AM
Just speculating but I wonder how many investors saw 0.2 shares of the Ks and 0.1 shares of the As and thought wow I got more Ks! Maybe I should sell the As and convert into Ks or something...

PS. Probably not good practice to compare, but SPS Commerce, what some are calling a comparable, earned 1/2 the adjusted EBITDA of CommerceHub and trades for 2x the market cap. Of course one may be overvalued or they both may be overvalued. Or maybe one is undervalued relative to the other.

(An interview here with the CEO - https://www.thestreet.com/story/13651205/1/it-s-business-as-usual-after-spinoff-says-commercehub-ceo.html.

Hearing him talk, this company really looks like an American version of Alibaba, or at least able to move in that direction. Obviously more retail than wholesale focused but can't see why it can't be used for both)
Title: Re: LVNTA - Liberty Ventures
Post by: Spekulatius on July 26, 2016, 04:16:58 PM
Also a bit weird that the A series is trading below the K series. If the world is just, this should flip.

A number of Liberty As are trading below Ks right now. It's mostly irrational, though some people try to explain it as a liquidity premium. I flip flop A's to K's couple times a year. Stopped posting it on CoBF since nobody seems to care.

I care and have been swapping around positions as well. Thank you for the reminders! It's free money the way I see it.
Title: Re: LVNTA - Liberty Ventures
Post by: scorpioncapital on July 27, 2016, 11:56:36 AM
Seems to have righted itself, all is well with the world :)

Still appears reasonable but I am wondering how the company is still quite small given 20 years in business? I also notice a comparable, SPS Commerce has 2x the revenues but much thinner margins: 13% adjusted ebidta to sales (guidance for 2016) vs CommerceHub at a whopping 37% (last year and including income tax). I did notice that QVC, a Liberty affiliate sends 10% of revenues to CommerceHub. That relationship seems pretty solid but not sure if that is the cause of the large difference. Gross margins seem about the same, but sales & marketing differs quite a bit between the two. Any ideas?
Title: Re: LVNTA - Liberty Ventures
Post by: thefatbaboon on August 02, 2016, 01:01:44 AM
Anyone heard anything regarding the Expedia spin?  The aim was for q2. Is it possible bodybuilding isn't enough cover for the irs?
Title: Re: LVNTA - Liberty Ventures
Post by: kh812000 on August 05, 2016, 06:57:45 AM

LVNTA earnings out. 

Fair Value of Public Holdings

(amounts in millions)                                   3/31/2016                       6/30/2016
HSN(1)                           $   1,047                  $   979
Total Attributed QVC Group                           $   1,047                  $   979
 
Charter(2)                           $   —                  $   1,225
Expedia(3)                              2,545                     2,509
FTD(4)                              268                     255
Liberty Broadband(5)                              —                     2,561
Tree.com(6)                              271                     245
Other Public Holdings(7)                               1,662                      479
Total Attributed Liberty Ventures Group                           $   4,746                  $   7,274
 

http://ir.libertyinteractive.com/releasedetail.cfm?ReleaseID=983229 (http://ir.libertyinteractive.com/releasedetail.cfm?ReleaseID=983229)
Title: Re: LVNTA - Liberty Ventures
Post by: namo on August 08, 2016, 04:41:11 AM
Anyone heard anything regarding the Expedia spin?  The aim was for q2. Is it possible bodybuilding isn't enough cover for the irs?

In the Q2 results announcement:
Quote
On June 10, 2016, Liberty Interactive filed an amendment to its registration statement disclosing that the previously announced spin-off of Liberty Expedia (comprised of, among other things, Liberty Interactive’s interest in Expedia, Inc., Liberty Interactive’s subsidiary Bodybuilding.com, LLC and $400 million of debt) would be changed to a mandatory redemptive split-off.
Does someone know what the latter is?
A cursory search did not yield much.
Title: Re: LVNTA - Liberty Ventures
Post by: kh812000 on August 09, 2016, 07:56:53 AM
So CHTR blows out earnings at 9.99B vs 9.47B expectations and sees synergies w/TWC&Brighthouse more than expected.  Not going to pay taxes until 2018 or 2019. 
 With the upcoming split off of LEXPE, the discount to CHTR via LBRDK has only widened since Liberty reported... Any one have ideas on what the contention is?



 
Title: Re: LVNTA - Liberty Ventures
Post by: scorpioncapital on August 09, 2016, 08:46:52 AM
I don't know but my experience is that when these sort of holding companies hold an underlying they almost always trade at a discount. They can spin to their hearts' content but it's unlikely to be zero. Probably the thinking is that holding a 1:1 proxy is better than a mixed bag of holdings but I'd pencil in anywhere from 5% to 20%. I keep saying it but these are one time gains. If your portfolio is 100% in this, you might unlock 10% in one year and that's it. Most people are not kamikaze enough to hold 100% so it might be a 10-20% holding in which case you stand to make 1-2% if the discount is eliminated. It's really peanuts in the grand scheme of things.
Title: Re: LVNTA - Liberty Ventures
Post by: kh812000 on August 09, 2016, 09:05:08 AM
Yes agree that hold cos trade at a disc.  I'm with you---usually 5-20% from my experience too.  But LVNTA is around 32% disc at this point from my view.  Add in that CHTR is going to keep going gangbusters over next few yrs based on disclosures of FCF growth and Rutledge as a rock star.  So you have a way to own CHTR at 30% disc and you know malone is going to simplify via merger of Libery Broadband/CHTR at some point (seemingly sooner than later due to a sense of urgency over there possibly from IRS RMT scrutiny) which means the 30% disc closes to 0.  The only question is when right...  So I dont see it as a 1-2% incremental but more like 20% CAGR CHTR capital gains with a 30% kicker via LVNTA arb.  I was thinking underperf was due to the push out of LEXE and possibly disappointment in change from spin to split...  I could be wrong but split to me seems like it only makes LVNTA holdco more valuable as LEXE gets split off right?


 
Title: Re: LVNTA - Liberty Ventures
Post by: Munger_Disciple on August 09, 2016, 09:56:02 AM
I think one of the reasons for the large discount is the overly generous stock option compensation of management at each of the holding companies (Liberty Ventures and Liberty Broadband). So you have to consider these frictional costs before you get to Charter stock thru' Liberty Ventures.
Title: Re: LVNTA - Liberty Ventures
Post by: scorpioncapital on August 09, 2016, 11:18:39 AM
Corporate actions are weird, almost every time I hurried I was chasing a phantom in the sense that the mispricing didn't instantly disappear. Now I'm trying to train myself to take more wait and see approach. If LMCA & LXSMA is any indication, LEXEA and LVNTA being cousins, LEXEA might close discount more than LVNTA which still has quite a few other holdings in it.
Title: Re: LVNTA - Liberty Ventures
Post by: thefatbaboon on October 05, 2016, 09:50:36 AM
amended S4 filed,

board meeting Nov 1 to approve split-off

100 lvnta on redemption day to become 40 Lexea and 60 Lvnta

redemption day to be "as soon as practicable"
Title: Re: LVNTA - Liberty Ventures
Post by: kh812000 on October 05, 2016, 08:45:49 PM
Report circulating that LEXE split would enable CTRP to take control of EXPE via LEXE in one swoop.  Suggests takeout value at EXPE equiv of $190/sh. Bullish for LVNTA and EXPE for that matter....
Title: Re: LVNTA - Liberty Ventures
Post by: yitech on October 07, 2016, 09:04:35 PM
Report circulating that LEXE split would enable CTRP to take control of EXPE via LEXE in one swoop.  Suggests takeout value at EXPE equiv of $190/sh. Bullish for LVNTA and EXPE for that matter....

Doesn't Priceline own 10%+ of Ctrip? How is this going to fly with the justice department?
Title: Re: LVNTA - Liberty Ventures
Post by: chesko182 on October 15, 2016, 01:01:54 PM
Has anyone looked at the exchangeable debentures attributed to Liberty Ventures? I'd like to understand the actual advantage they hold from a cash flow and PV of asset/liability perspective and additionally they're trading between 50-60 cents on the dollar yielding around 10% which makes them seem pretty cheap. Does anyone know why this is the case?

Thanks
Title: Re: LVNTA - Liberty Ventures
Post by: Foreign Tuffett on October 15, 2016, 10:13:54 PM
Has anyone looked at the exchangeable debentures attributed to Liberty Ventures? I'd like to understand the actual advantage they hold from a cash flow and PV of asset/liability perspective and additionally they're trading between 50-60 cents on the dollar yielding around 10% which makes them seem pretty cheap. Does anyone know why this is the case?

Thanks

The purpose (from Ventures' perspective) of the exchangeable debentures is to push all tax liabilities as far into the future as possible. The debentures allow for tax deductions over and above their actual cash coupons every year, but upon maturity this reverses and results in a massive tax liability for Ventures.

It is unclear to me what the tax implications of these would be for the holder.

Title: Re: LVNTA - Liberty Ventures
Post by: namo on November 06, 2016, 01:25:11 PM
Has anyone "participated" in the split-off? It's my first split-off, so I could be mistaken, but I thought the point was to exchange shares of LVNTA with shares of the new Liberty Expedia.

However, I don't think my broker (Interactive Brokers) had any corresponding Corporate Action going on (I admit I forgot to double-check before Friday, which might have been the deadline).

If someone more experienced with split-off cares to enlighten, I'd appreciate it.


edit: OK, it seems like a mandatory corporate action, so everybody gets the new shares in proportion... That's what I initially thought.
Title: Re: LVNTA - Liberty Ventures
Post by: scorpioncapital on November 07, 2016, 08:20:13 AM
I see something LVNTA.OLD at IB. Probably the distribution into LVNTA/LEXEA will occur soon but don't see it today.

Title: Re: LVNTA - Liberty Ventures
Post by: chesko182 on November 07, 2016, 08:41:15 AM
does anyone have a sense of how the split off turned out?

I don't see anything reflected in my account, which I think should take a couple of days. But I did notice LVNTA trading down 5% at 37 and LEXEA trading around 42. Shouldn't have LVNTA sold off by 40% to adjust for the splitoff? If not value realization will be spectacular here.

Let me know your thoughts.
Title: Re: LVNTA - Liberty Ventures
Post by: scorpioncapital on November 07, 2016, 08:47:04 AM
There's no free lunch, only a discounted lunch :)
Look at the share outstanding of each entity, my theory is they did it this way to maintain roughly similar prices to before because they didn't like the large few day drops when people who had no clue just saw a big drop and sold knee-jerk (this is just a theory though).

Title: Re: LVNTA - Liberty Ventures
Post by: Shooter MacGavin on January 03, 2017, 11:45:47 AM
LVNTA seems to be a good way to own a levered bet on (already levered) CHTR, and although I know team Liberty will continue to defer taxes on every holding as long as possible, i'm trying to figure out how much of the current NAV discount is due to accrued tax liabilities and how much is other structural reasons?

anyone have a sense for what the accumulated deferred tax liabilities at LINTA is for the various sub-holdings?  I don't think it's very clear from the LINTA 10-q and 10-k's to me.

1) LBRDA/K ,  - is it current price ($73) - $56.23 at 35%? 
2) CHTR - (exchange of TWC ..which was from a long time ago, so what's the cost basis here? I tried going back)

and then at LBRDA/K?  They initially bought CHTR around 2011 at a very low cost base, and then issued stock to LINTA to buy $2.4B more.  Anyone know what the associated deferred tax liability is?  (Is it as simple as just figuring out the average cost basis and taxing it at 35%)

 Also they've spoken about the structure for the exchangeable debentures providing them tax deductions over the 1.75% coupon.  Is this basically from the implied cost of the $750 value of CHTR when it converts at $342 minus the cost at the time of issue? Can someone familiar with this please explain it to me?

How do you guys think about the deferred tax liabilities generally? Team Liberty never seems to address deferred tax liabilities in their NAV calcs, and I know they'll try to defer it forever...but I think as investors we need to think about them when deciding between owning CHTR directly (or Sirius or whatever) and LBRDK or LVNTA for example. 

Thanks for your insights!
Title: Re: LVNTA - Liberty Ventures
Post by: thefatbaboon on January 19, 2017, 06:52:05 AM
shooter,

have you looked through the recent investor day slides?  If not, you should.
Title: Re: LVNTA - Liberty Ventures
Post by: Shooter MacGavin on January 26, 2017, 12:55:42 PM
shooter,

have you looked through the recent investor day slides?  If not, you should.

I did yes.  I don't think they subtract the deferred tax liabilities from their NAV.  Presumably they are operating under the assumption that they will always figure out a way to defer taxes.  But if I were to choose between buying Charter outright or some proxy for it through broadband or ventures (let's ignore the leverage at LVNTA for the moment), then I would naturally discount the proxy if it had an associated deferred tax liability with it.

if I'm thinking about it incorrectly, please let me know. 

Title: Re: LVNTA - Liberty Ventures
Post by: thefatbaboon on January 26, 2017, 02:34:12 PM
I meant that the presentation and appendices would help with your understanding of the exchangeables. 

On the capital gains...In forty years Malone has not done something like that...and if he wasn't tempted to do it with Trip or Expedia it would be simply incredible if he did it with Charter and Broadband.  Either way, if you probability weight the DTL of the cap gains it's going to be immaterial to a valuation.

So, I'd respectfully suggest you focus on the exchangeables because improving your understanding and then deciding on your valuation of them can have a very big value swing. Then decide if you are going to look through LBRD to ascribe a proportionate % of LBRD's CHTR shares to LVNT instead of LBRDK. All the other assets and liabilities are fairly simple/small. 
Title: Re: LVNTA - Liberty Ventures
Post by: ABM on March 05, 2017, 04:24:33 PM
Any thoughts/speculations on why they did not repurchase any stock in Q4 or in January 2017? 

Most I can guess is a pending need for the cash to fund M&A or they believe the underlying assets are expensive (e.g. CHTR) even when considering the substantial discount to NAV using fair value approach for assets. 

On the CHTR being expensive argument, you can find support in the fact they collared about 1/3 or their economic exposure through a exchangable bond offering in Q3/Q4 '16 timeframe. 

At current levels, I still see low double digit returns to CHTR's equity over the next 5 years using relatively modest growth assumptions of 6% for EBITDA, a normalization of the cash tax rate to 38%, and 4 turns of debt along the way.  Seems compelling enough to buy more given the discount to NAV at LVNTA. 

I am guessing they have a higher expected return project to fund on the horizon. 
Title: Re: LVNTA - Liberty Ventures
Post by: jay21 on March 05, 2017, 09:21:02 PM


On the CHTR being expensive argument, you can find support in the fact they collared about 1/3 or their economic exposure through a exchangable bond offering in Q3/Q4 '16 timeframe. 



Are you sure it wasnt just rolling old TWC exposure into CHTR post acquisition?
Title: Re: LVNTA - Liberty Ventures
Post by: ABM on March 06, 2017, 01:47:10 PM

I thought it was more of a maturity than a roll but not sure. 
Title: Re: LVNTA - Liberty Ventures
Post by: thefatbaboon on March 09, 2017, 07:17:00 AM
Any thoughts/speculations on why they did not repurchase any stock in Q4 or in January 2017? 

Most I can guess is a pending need for the cash to fund M&A or they believe the underlying assets are expensive (e.g. CHTR) even when considering the substantial discount to NAV using fair value approach for assets. 

On the CHTR being expensive argument, you can find support in the fact they collared about 1/3 or their economic exposure through a exchangable bond offering in Q3/Q4 '16 timeframe. 

At current levels, I still see low double digit returns to CHTR's equity over the next 5 years using relatively modest growth assumptions of 6% for EBITDA, a normalization of the cash tax rate to 38%, and 4 turns of debt along the way.  Seems compelling enough to buy more given the discount to NAV at LVNTA. 

I am guessing they have a higher expected return project to fund on the horizon.

I was surprised by this also and had assumed that quickly buying in 20% of the LVNTA float (taking advantage of the high post-splitoff volume) had been the reason for selling the new $750m CHTR convertible struck at $341.  Seemed ingenious & would have been like selling CHTR forward at $341 and using the money to simultaneously buy back CHTR at effectively less than $200 per share.

Perhaps as you say they are not thinking like this, and they are looking at the LVNTA balance sheet as a source of funds for new ventures.  Personally I'd prefer they didn't.  There is too much CHTR in LVNTA to be diversified away meaningfully and it make more sense to just accept that LVNTA is now a CHTR vehicle and maximize the value on that basis.

There's another possibility, that they thought it inappropriate to repurchase stock when such a significant split-off had been effected mid quarter and LVNTA had not reported any results on an ex-Expedia basis.

Title: Re: LVNTA - Liberty Ventures
Post by: Jurgis on March 09, 2017, 08:47:44 AM
I haven't looked at this in depth recently. Does LVNTA have higher discount to underlying CHTR value than LBRDA?
Title: Re: LVNTA - Liberty Ventures
Post by: thefatbaboon on March 09, 2017, 12:41:02 PM
I haven't looked at this in depth recently. Does LVNTA have higher discount to underlying CHTR value than LBRDA?

Yes
Title: Re: LVNTA - Liberty Ventures
Post by: ABM on March 09, 2017, 06:00:03 PM
Any thoughts/speculations on why they did not repurchase any stock in Q4 or in January 2017? 

Most I can guess is a pending need for the cash to fund M&A or they believe the underlying assets are expensive (e.g. CHTR) even when considering the substantial discount to NAV using fair value approach for assets. 

On the CHTR being expensive argument, you can find support in the fact they collared about 1/3 or their economic exposure through a exchangable bond offering in Q3/Q4 '16 timeframe. 

At current levels, I still see low double digit returns to CHTR's equity over the next 5 years using relatively modest growth assumptions of 6% for EBITDA, a normalization of the cash tax rate to 38%, and 4 turns of debt along the way.  Seems compelling enough to buy more given the discount to NAV at LVNTA. 

I am guessing they have a higher expected return project to fund on the horizon.

I was surprised by this also and had assumed that quickly buying in 20% of the LVNTA float (taking advantage of the high post-splitoff volume) had been the reason for selling the new $750m CHTR convertible struck at $341.  Seemed ingenious & would have been like selling CHTR forward at $341 and using the money to simultaneously buy back CHTR at effectively less than $200 per share.

Perhaps as you say they are not thinking like this, and they are looking at the LVNTA balance sheet as a source of funds for new ventures.  Personally I'd prefer they didn't.  There is too much CHTR in LVNTA to be diversified away meaningfully and it make more sense to just accept that LVNTA is now a CHTR vehicle and maximize the value on that basis.

There's another possibility, that they thought it inappropriate to repurchase stock when such a significant split-off had been effected mid quarter and LVNTA had not reported any results on an ex-Expedia basis.

Very interesting theory and it is right up Malone's alley so only leaves me more perplexed.  I consider LVNTA one of the better values in US listed equities and by all accounts Malone has not reinforced my opninion through utilizing the large cash balance. 

Another theory could be they may be view LVNTA's as a source of liquidity for QVCA if things deterioate even further given the leverage levels at QVC.  I know it is complicated but Malone controls both entities so they could recollapse or QVC would issue shares to LVNTA to pay off some debt if things get out of hand.
Title: Re: LVNTA - Liberty Ventures
Post by: scorpioncapital on March 09, 2017, 06:12:26 PM
I don't think QVCA or LVNTA are going to have any business dealings. If anything, LVNTA might be spun-off to protect it as a independent company rather than a tracker. But even that may be unlikely.
LVNTA also has some nice assets like TREE and ILG, a sort of Internet venture incubator alongside the main event of Charter. This makes it a tad more interesting than Charter.
Title: Re: LVNTA - Liberty Ventures
Post by: thefatbaboon on March 09, 2017, 11:33:28 PM
Any thoughts/speculations on why they did not repurchase any stock in Q4 or in January 2017? 

Most I can guess is a pending need for the cash to fund M&A or they believe the underlying assets are expensive (e.g. CHTR) even when considering the substantial discount to NAV using fair value approach for assets. 

On the CHTR being expensive argument, you can find support in the fact they collared about 1/3 or their economic exposure through a exchangable bond offering in Q3/Q4 '16 timeframe. 

At current levels, I still see low double digit returns to CHTR's equity over the next 5 years using relatively modest growth assumptions of 6% for EBITDA, a normalization of the cash tax rate to 38%, and 4 turns of debt along the way.  Seems compelling enough to buy more given the discount to NAV at LVNTA. 

I am guessing they have a higher expected return project to fund on the horizon.

I was surprised by this also and had assumed that quickly buying in 20% of the LVNTA float (taking advantage of the high post-splitoff volume) had been the reason for selling the new $750m CHTR convertible struck at $341.  Seemed ingenious & would have been like selling CHTR forward at $341 and using the money to simultaneously buy back CHTR at effectively less than $200 per share.

Perhaps as you say they are not thinking like this, and they are looking at the LVNTA balance sheet as a source of funds for new ventures.  Personally I'd prefer they didn't.  There is too much CHTR in LVNTA to be diversified away meaningfully and it make more sense to just accept that LVNTA is now a CHTR vehicle and maximize the value on that basis.

There's another possibility, that they thought it inappropriate to repurchase stock when such a significant split-off had been effected mid quarter and LVNTA had not reported any results on an ex-Expedia basis.

Very interesting theory and it is right up Malone's alley so only leaves me more perplexed.  I consider LVNTA one of the better values in US listed equities and by all accounts Malone has not reinforced my opninion through utilizing the large cash balance. 

Another theory could be they may be view LVNTA's as a source of liquidity for QVCA if things deteriorate even further given the leverage levels at QVC.  I know it is complicated but Malone controls both entities so they could recollapse or QVC would issue shares to LVNTA to pay off some debt if things get out of hand.

While we are speculating....another theory concerns the uncertainty over the Republican tax reform and mooted changes to the deductibility of interest.  The situation where LVNTA is most undervalued is where one assumes the Exchangeables continue to create tax shield cash flow (and those cashflows earn a decent return between the time they are received and true-up with the IRS at the end).  If interest loses its deductibility then the best case disappears as a possibility.  And in a worst case scenario the tax law changes might cause some kind of disruption which forces early repurchase of the Exhangeables and early settlement of the existing DTL.

Along the line of what you guys mention...there's also the possibility that they want to retain some financial flexibility while they study a possible "smoosh" which might require buying out early or sweetening terms on some QVC or LVNTA debentures.  There was talk at the November meeting of how it would be logical to get the LBRDK/CHTR stake rationalized in a single entity and the process of doing this might require the use of QVC as an ATB.
Title: Re: LVNTA - Liberty Ventures
Post by: giofranchi on March 23, 2017, 03:47:18 AM
Does anyone have a SOTP analysis of LVNTA? I have an hard time finding out what its NAV might be today. Thank you!

Cheers,

Gio
Title: Re: LVNTA - Liberty Ventures
Post by: yitech on April 04, 2017, 05:38:23 AM
Liberty Interactive Enters into Agreement to Acquire General Communication, Inc., Combine with Liberty Ventures Group and Split-off Combined Company from Liberty Interactive
http://www.businesswire.com/news/home/20170404005774/en/
Title: Re: LVNTA - Liberty Ventures
Post by: Liberty on April 04, 2017, 05:46:13 AM
Quote
Liberty Interactive will then effect a tax-free separation of its controlling interest in the combined company (to be named GCI Liberty, Inc. (“GCI Liberty”)) to the holders of Liberty Ventures common stock in full redemption of all outstanding shares of such stock. […]
This transaction will ultimately create a standalone Liberty Ventures, reducing the tracking stock discount and enabling an asset-backed QVC Group […]
“This transaction with Liberty Interactive brings GCI back full circle, as GCI was part of TCI until 1986. […]
Upon completion of the contribution of Liberty Interactive’s entire equity interests in Liberty Broadband, Charter, LendingTree, Inc., together with the Evite operating business and certain other assets and liabilities (including, subject to certain conditions, the FTD Companies, Inc. equity interest), Liberty Interactive will acquire a 77% undiluted equity interest and 84% undiluted voting interest in GCI Liberty. […]
The split-off of Liberty Interactive’s interest in GCI Liberty is expected to be completed by the first quarter of 2018.
Title: Re: LVNTA - Liberty Ventures
Post by: chesko182 on April 04, 2017, 07:49:30 AM
is anyone selling at these levels? and if so, what is the thought process? Is there any additional upside here from an NAV/catalyst standpoint?
Title: Re: LVNTA - Liberty Ventures
Post by: Jurgis on April 04, 2017, 07:52:07 AM
Thanks thefatbaboon. I shifted from LBRDA to LVNTA last couple weeks.

Now will have to think what to do next.  8)
Title: Re: LVNTA - Liberty Ventures
Post by: scorpioncapital on April 04, 2017, 09:11:03 AM
I notice some assets are going back to QVC from Ventures like IILG shares? Or is that a temporary move before the spin-off of Ventures as standalone?
Title: Re: LVNTA - Liberty Ventures
Post by: ABM on April 04, 2017, 08:40:29 PM
I posted this in the GNMCA thread but it likely belongs here.  Apologies!

Some questions / thoughts on questions

1) After reading the K for GNCMA, I realized the "Wireless" segment is different then what many of you may think.  It is a wholesale business that sells capacity on its network to other carriers and notes Vz is its largest customer.  The "retail" wireless business is included in the Wireline segment.  That being said, look at the segment disclosures to see the margins in the Wireless segment (>60% EBITDA margins) while cap ex only consumers about 20%-30% of that EBITDA implying a very high FCF conversion for this business.  Diamond in the rough?

 Btw, Company hasn't paid material cash taxes in about a decade and have $270M in NOLs.

I am trying to think about how this maybe a strategic asset given its the only network available in Alaska, apparently, so Vz and T have no choice but to lease space on their assets to service their own customers.  I realize there is some accounting noise here around deferred payments that are amortized on the P&L for cash received in prior periods while other contracts are rolling off but if this is strongly position asset then it may be used as leverage to negotiate with Vz in the US via CHTR.  Worth digging into to understand more, imo

3) Upside from improvement in capital efficiency and margins given the pivot away from growth to operations.  The CEO sounded almost exhausted on the call after recounting the decade long M&A boom so may be a lot of low hanging fruit as they shift to integration.

4) This is about as levered as it gets.  Round numbers, LVNTA paid 8.5x EBITDA and paid 5.6x of that with debt (including assumption and treating preferreds as debt).  This means they only put up about 35% of EV so even at a 3% or 4% FCF yield with 5% EBITDA growth will allow them to leverage that growth (remember target 5x debt target) delivering a mid to high single debt yield on such a small equity base.  I see a 14% IRR on the investment assuming 4% FCF yield +5% growth +5% yield from debt issuance spent on buybacks with a 8x exit and 5x of debt.  Trying to be conservative (irony appreciated given the leverage levels employed)

5) This appears to be a major tailwind for QVC as it now retains the interest tax shield on the exchangeables rather than paying it to LVNTA.  This could add $130M FCF in nearterm growing to $400M recurring in a few years.  On a base of say $950M FCF, this is significant for the IV of the business. 

3) I spoke with IR today and they implied a holistic approach was used to evaluate the merits of the transaction looking at total value created across LVNTA and QVCA.  So even if its dilutive to near term NAV/share at LVNTA it reduces complexity narrowing the discount and the leverage benefit to QVCA plus higher FCFs should create value over there.  In other words, sum of the parts vs premium paid for the acquisition justifies it. 

Some Math
LVNTA is now the nearly the most levered it has ever been as defined by tangible FMV assets / market cap, with pro-forma assets per share of $90 on a market PPS of $50 implying 1.8x leverage ratio. I asked the IR about this and they implied that growth in the underlying assets is considered  reliable so increasing leverage to benefit the equity makes sense. 

I expect the $500M raised from the LBRDK margin loan will be used to repurchase LVNTA stock combined along with the $600M in FCF and incremental debt that GNMCA should generate over the next 5 years.  If NAV discount remains 20% then we should see repurchases reduce the share count by about 20% leading to a high teens IRR on investment.  Ideally, and typical Malone, I would expect for them to exhaust all balance sheet capacity and shrink the equity before they work on collapsing the discount, which is likely a 3-5 year event (ex. a Vz bid) leading to >20% IRR due to LVNTA discount and LBRD discounts collapsing from CHTR merger. 
Title: Re: LVNTA - Liberty Ventures
Post by: thefatbaboon on April 05, 2017, 09:53:16 AM
ABM,

Thanks for the interesting update!

Title: Re: LVNTA - Liberty Ventures
Post by: Munger_Disciple on April 06, 2017, 02:35:01 PM
Can someone point me to the recorded conference call (or a transcript of it) conducted by Maffei & Duncan after the General Communication deal was announced? TIA
Title: Re: LVNTA - Liberty Ventures
Post by: saltybit on July 06, 2017, 09:45:38 AM
http://www.yetanothervalueblog.com/2017/07/liberty-ventures-gci-merger-set-to.html

Liberty Ventures GCI merger set to unlock significant value $LVNTA $GNCMA
Title: Re: LVNTA - Liberty Ventures
Post by: ABM on July 07, 2017, 01:38:01 PM
The blog post was great and I found it well researched and rationalized.  My one critique is it fails to mentions the Zinterhofer dimension, which I consider an important variable. 

Anyone consider the Searchlight/Zinterhofer connection here? I find it curious that Zinterhofer joined the GNMCA board, just in 2015, and  that he appears to have deep Malone connections.  This includes he is Chairman of the Board at CHTR and is Malone's partner in Lat AM where he owns a portion of the Liberty Puerto Rico asset that is co-owned with LILAK.  He is also a vendor to LILAK through his Hemishpere Media Group (HMTV) interest.

I am wondering more if this meant to be a flip given the asset appears distressed and Malone foresaw the value this asset could have in a scaled operator like CHTR (think programming) but was small enough to fall off the radar.  Further, the Vz asset increases in attractiveness to a scaled cable co as they position themselves to negotiate for their spot in a wireless/wireline converged world (e.g. quad play) increasing its value to the right owner. 



Title: Re: LVNTA - Liberty Ventures
Post by: maybe4less on July 07, 2017, 01:57:16 PM
The blog post was great and I found it well researched and rationalized.  My one critique is it fails to mentions the Zinterhofer dimension, which I consider an important variable. 

Anyone consider the Searchlight/Zinterhofer connection here? I find it curious that Zinterhofer joined the GNMCA board, just in 2015, and  that he appears to have deep Malone connections.  This includes he is Chairman of the Board at CHTR and is Malone's partner in Lat AM where he owns a portion of the Liberty Puerto Rico asset that is co-owned with LILAK.  He is also a vendor to LILAK through his Hemishpere Media Group (HMTV) interest.

I am wondering more if this meant to be a flip given the asset appears distressed and Malone foresaw the value this asset could have in a scaled operator like CHTR (think programming) but was small enough to fall off the radar.  Further, the Vz asset increases in attractiveness to a scaled cable co as they position themselves to negotiate for their spot in a wireless/wireline converged world (e.g. quad play) increasing its value to the right owner.

When this deal was announced, the Liberty team was surprisingly open about the plan being to eventually sell GNCMA to Charter, so I very much think it is meant to be a flip. At least was that was my interpretation.
Title: Re: LVNTA - Liberty Ventures
Post by: Gamecock-YT on July 07, 2017, 04:21:01 PM

I am wondering more if this meant to be a flip given the asset appears distressed and Malone foresaw the value this asset could have in a scaled operator like CHTR (think programming) but was small enough to fall off the radar.  Further, the Vz asset increases in attractiveness to a scaled cable co as they position themselves to negotiate for their spot in a wireless/wireline converged world (e.g. quad play) increasing its value to the right owner.

What asset 'appears distressed'?

In re: the blog post, the backhaul agreement AFAIK wasn't made just with Verizon, also included AT&T, etc. and on the Verizon point, sure there are synergies, but is Verizon really going to give two flips about AWN's network when making a play on GCI/Charter? Reads a little bit too much LVNTA/Malone fanboy than cutting GNCMA analysis for my taste. But overall, I agree with his general points, which is why I'm still super long GNCMA.

Title: Re: LVNTA - Liberty Ventures
Post by: scorpioncapital on January 09, 2018, 01:09:30 AM
IB sent a note that LVNTA would undergo a 1:1 reverse stock split Feb 8th. I have never seen a 1:1 reverse stock split so not sure if it's just the wrong wording or if the mechanics of the GCI merger will appear as a 1:1 reverse stock split cosmetically?
Title: Re: LVNTA - Liberty Ventures
Post by: WayWardCloud on January 09, 2018, 01:57:13 AM
Not too sure about the wording either but here is how it happened in the past with Dr. Malone's spin-offs.
Your LVNTA stock gets renamed LVNTA.OLD after the market is closed on the 8th. You are then given an equal amount of shares (1:1) of the newly created GCI Liberty stock (not sure what the ticker name will be) and your LVNTA.OLD is liquidated tax free.
For example, LILAK.OLD still appears in my IB historical but it reads "0" for P/L.

I'm excited! I was expecting the spin-off to happen at the very end of the quarter but it looks like we only have a month to go which means the buybacks can start sooner.
Title: Re: LVNTA - Liberty Ventures
Post by: rtvinvest on January 09, 2018, 06:38:39 AM
Yes, they've announced the dates for GCI and LVNT meetings where they will vote on the proposal:

"Dear Shareholders of General Communication, Inc.: NOTICE IS HEREBY GIVEN of the special meeting of shareholders of General Communication, Inc. (GCI) to be held at 8:00 a.m., local time, on February 2, 2018"

(http://ir.gci.com/static-files/bd3be7c5-061b-41df-9984-10bc2c151718)
Title: Re: LVNTA - Liberty Ventures
Post by: scorpioncapital on January 09, 2018, 06:50:21 AM
Anyone know the tax consequences of this split-off for non-us holders? Is it a combination of a spin-off and a merger, or a merger first then a spin-off?

Title: Re: LVNTA - Liberty Ventures
Post by: vince on March 11, 2018, 07:17:58 PM
Can anybody offer an explanation why the discount at ventures has widened substantially in the last couple months? Very strange how quiet it's been around the internet boards and blogs in regards to Ventures discount to its Chtr exposure. 
Title: Re: LVNTA - Liberty Ventures
Post by: ABM on March 12, 2018, 07:54:35 AM
I think the updated reattribution is a factor as it increases the leverage of post spin due to the higher cash payment to QVCA for taking on the debt.  This is due to the tax reform that decreased the NPV of the interest tax deductions.  I have them at just under $250M assuming they settle the CHTR exchangeables with QVCA for Cash within 6 months.  See 10k for discussion on the tender provision. 
Title: Re: LVNTA - Liberty Ventures
Post by: WayWardCloud on March 22, 2018, 04:15:33 PM
I'm trying to calculate the new NAV for GLIB and would appreciate any help :)
I'm basing the value of GCI on the buyout price but we could also do multiples of EBITDA and add the debt down below at the Liberty level instead.

GCI Enterprise Value = $2.7B
Evite = (don’t know, not much, any ideas of value?)
Liberty Broadband Stake = 42.7m shares * $85.27 / share = $3.64B
Charter Stake = 5.4m shares * $325.47 / share = $1.74B
Lending Tree Stake = 3.2m shares * $257.75 / share = $1.16B
Cash = $0.466B
Debt = (??)
Margin Loan?
Other liabilities with Liberty Interactive, With Qurate?

Total NAV = $?

Shares Outstanding = 105M GLIBA + 4.5 GLIBB + 7.3M GLIBP = 116.8M

NAV per share = $?
Title: Re: LVNTA - Liberty Ventures
Post by: Shooter MacGavin on March 23, 2018, 05:53:55 AM
I'm trying to calculate the new NAV for GLIB and would appreciate any help :)
I'm basing the value of GCI on the buyout price but we could also do multiples of EBITDA and add the debt down below at the Liberty level instead.

GCI Enterprise Value = $2.7B
Evite = (don’t know, not much, any ideas of value?)
Liberty Broadband Stake = 42.7m shares * $85.27 / share = $3.64B
Charter Stake = 5.4m shares * $325.47 / share = $1.74B
Lending Tree Stake = 3.2m shares * $257.75 / share = $1.16B
Cash = $0.466B
Debt = (??)
Margin Loan?
Other liabilities with Liberty Interactive, With Qurate?

Total NAV = $?

Shares Outstanding = 105M GLIBA + 4.5 GLIBB + 7.3M GLIBP = 116.8M

NAV per share = $?


In terms of at GCI Liberty, I just subtract a $1B margin loan LBDRK.
And at GCI Liberty operating I have $1.481B term loan and GCI preferred of $172M accruing at 7%.

So using your numbers NAV of $57.30, not counting the DTL's for Charter and LBRDK.
Title: Re: LVNTA - Liberty Ventures
Post by: reader on March 23, 2018, 06:05:16 AM
$tree is $110 higher at $361
Title: Re: LVNTA - Liberty Ventures
Post by: WayWardCloud on March 23, 2018, 01:54:59 PM
Thank you both so much! Here's the updated math:

GCI Enterprise Value = $2.7B
Evite = don’t know, not much
Liberty Broadband Stake = 42.7m shares * $83.82 / share = $3.58B

Charter Stake = 5.4m shares * $315.07 / share = $1.70B

Lending Tree Stake = 3.2m shares * $335.00 / share = $1.14B

Cash = $0.466B

Margin Loan to LBRDK = ($1B)
GCI term loan = ($1.481B)
GCI preferred = ($0.172B) (accruing at 7%)

Total NAV = $6.933B



Shares Outstanding = 105M GLIBA + 4.5 GLIBB + 7.3M GLIBP = 116.8M

NAV per share = $59.36
Price = $51.05

Upside (%) = 16
Discount (%) = 14

If we add the intrinsic discount from Broadband to the calculation (see detail below), the LBRDA stake is now worth $3.91B which bring Total NAV to $7.263B, NAV per share to $62.18 or a 17.9% discount / 21.8% Upside.
(This is all Without counting the accruing 7%/year upon the preferred because I didn't know how to and it seems small enough)



Liberty Broadband

Charter Stake = 54.1M shares X 312.39 = $16.9B
Skyhook AKA TruePosition = $40M (estimate from investor day 2016)
Cash = $81M
Margin Loan = ($500M)
NAV = $16.521B

Shares Outstanding = A:26,304,641 + B:2,455,179 + C:152,576,524 = 181.34M
NAV per share = $91.1
Price = 83.35
Upside (%) = 9.3
Discount (%) = 8.5

Title: Re: LVNTA - Liberty Ventures
Post by: winjitsu on March 23, 2018, 02:07:31 PM
(This is all Without counting the accruing 7%/year upon the preferred because I didn't know how to and it seems small enough)

Based on this EV build up, you can model the value as the negative DCF value of the dividend stream.
Title: Re: LVNTA - Liberty Ventures
Post by: Munger_Disciple on March 23, 2018, 03:16:57 PM
Quote
Shares Outstanding = 105M GLIBA + 4.5 GLIBB + 7.3M GLIBP = 116.8M


WayWardCloud,

Since you subtract out the preferred stock value in the NAV calculation, you should not include the number of preferred shares in the per share NAV calculation. You should instead use the 109.5M number in the denominator.
Title: Re: LVNTA - Liberty Ventures
Post by: Spekulatius on March 29, 2018, 03:20:59 PM
It’s darn messy for a spin-off, probably by design. I owned LMCA just a short time ago and that thing started to split into pieces I don’t know how many times and shares had children and grandchildren. I sold most shares (for decent enough profits) sine the individual stakes get small and at least for some, the discount to NAV at that time. I sill hold andere shares in the Atlanta Braves that did OK. it’s got to be almost a full i me job to keep track of these things. Too much work for  me, but one of these days one of these shares becomes very cheap, I am sure.
Title: Re: LVNTA - Liberty Ventures
Post by: scorpioncapital on March 30, 2018, 01:47:53 AM
Usually discounts of holding companies that hold public shares seldom close completely. It can expand or contract but I've seldom seen it go to zero. They merged with an operating company presumably to contract the discount. But any thesis of investment should assume a relatively constant discount as business as usual.
Title: Re: LVNTA - Liberty Ventures
Post by: WayWardCloud on March 30, 2018, 03:34:00 AM
I agree in general but in the case of GCI Liberty (we should rename the thread by the way) Maffei has made no mystery that the end game is to collapse the company with Broadband and/or Charter which will remove the discount.
Title: Re: LVNTA - Liberty Ventures
Post by: rtvinvest on March 30, 2018, 04:51:11 AM
I agree in general but in the case of GCI Liberty (we should rename the thread by the way) Maffei has made no mystery that the end game is to collapse the company with Broadband and/or Charter which will remove the discount.

Do you have any view on the tax consequences of e.g. LBRD buying GLIB (which has a deferred tax liability on their gain on LBRD shares)?
Title: Re: LVNTA - Liberty Ventures
Post by: WayWardCloud on March 30, 2018, 12:49:47 PM
I agree in general but in the case of GCI Liberty (we should rename the thread by the way) Maffei has made no mystery that the end game is to collapse the company with Broadband and/or Charter which will remove the discount.

Do you have any view on the tax consequences of e.g. LBRD buying GLIB (which has a deferred tax liability on their gain on LBRD shares)?

Unfortunately, I'm far from a tax expert. I tend to trust Liberty's management on those maters based on their stellar track record at creatively avoiding taxes.
A couple ideas you might want to look into about that question:

GLIBA's system of debentures
- GCI Aquisition Presentation, slides 24 and 25 : http://ir.gci.com/static-files/b1d6879a-de80-4c40-9290-1d3bb913793d
- This article : https://moiglobal.com/nathaniels-beautiful-mind/

Reverse Morris Trusts:
- https://www.investopedia.com/terms/r/reverse-morris-trust.asp
(see also RMT use in the case of Liberty Media / Liberty Sirius XM / SiriusXM)

I'm not smart enough to tell you more specifically what will happen but I know Liberty's accountants are the absolute best and that John Malone would rather have a triple colonoscopy than pay more than the absolute minimum amount of capital gains as possible. They have a whole array of creative tools to use from the Playbook and a shareholder base ready to go through complex stuff. I also hear the new tax code was written and passed hastily for political reason, thus it's probably full of brand new loop holes...
Title: Re: LVNTA - Liberty Ventures
Post by: jgyetzer on May 03, 2018, 03:38:56 PM
Was there some announcement with GCI Liberty that it’s up 18% after hours?  Or is that just some glitch?
Title: Re: LVNTA - Liberty Ventures
Post by: Shooter MacGavin on May 03, 2018, 03:47:30 PM
Was there some announcement with GCI Liberty that it’s up 18% after hours?  Or is that just some glitch?

I don't see a quote for that.  I have RT quotes in IB and still shows the sad $44ish.

By any chance are you using Mt. Gox for your GLIBA quotes?  :P
Title: Re: LVNTA - Liberty Ventures
Post by: jgyetzer on May 03, 2018, 04:00:49 PM
It was Ameritrade. Must just be me.
Title: Re: LVNTA - Liberty Ventures
Post by: scorpioncapital on May 04, 2018, 08:13:48 AM
I saw it too briefly on Google. I've seen liberty pieces sometimes have weird after or before hour quotes. Usually I check the underlying position , eg chtr to confirm if it's fake.
Title: Re: LVNTA - Liberty Ventures
Post by: scorpioncapital on May 10, 2018, 10:19:34 AM
I see about a 7 percent discount to q1 fair market value of charter, broadband, and lending tree. Yet it doesn't seem to move anymore one to one with charter though it's the biggest asset. Is the operating Alaska co going to have some percentage impact like If charter moves by 1 point , gci will move by 0.8?
Title: Re: LVNTA - Liberty Ventures
Post by: jgyetzer on May 10, 2018, 10:42:58 AM
GCI only accounts for about 25% of EV so I can’t imagine why it would aside from market misunderstanding. I haven’t recalculated this recently but Maffei in the cc said there’s a 20% discount to NAV.  Does that seem right?
Title: Re: LVNTA - Liberty Ventures
Post by: WayWardCloud on May 10, 2018, 11:53:22 AM
Since GCI Liberty isn't only composed of stakes in publicly traded companies but has acquired their own operating business in Alaska I don't see how anyone can get a super specific percentage of discount without making assumption on valuing their cable system anymore, and that will depend on what a fair multiple of EBITDA it is worth to you... For what it's worth I have them around a 16% discount if I count GCI at acquisition price which could be very conservative.
Title: Re: LVNTA - Liberty Ventures
Post by: Spekulatius on May 11, 2018, 04:01:50 AM
For what it's worth I have them around a 16% discount if I count GCI at acquisition price which could be very conservative.

Why is using GCI acquisition price a conservative estimate of its value. It seems that cable assets are down quite a bit, since the acqusition was announced and there was an acquisition premium as well.
Title: Re: LVNTA - Liberty Ventures
Post by: scorpioncapital on May 11, 2018, 09:38:39 AM
Aren't they using fair market value ?
Title: Re: LVNTA - Liberty Ventures
Post by: Munger_Disciple on May 11, 2018, 09:48:54 AM
Per my calculations, Maffei was using the acquisition price of GCI in the calculation of NAV. They paid an EV multiple of 8.5 x normalized EBITDA of $330M which I think is reasonable for a Quad play, monopolistic cable company.
Title: Re: LVNTA - Liberty Ventures
Post by: Spekulatius on May 11, 2018, 08:23:46 PM
Per my calculations, Maffei was using the acquisition price of GCI in the calculation of NAV. They paid an EV multiple of 8.5 x normalized EBITDA of $330M which I think is reasonable for a Quad play, monopolistic cable company.

I think they paid $1.12B for GCI, but GCI only made just short of $20M in EBITDA (or Dr. Malone’s Version of it), so it seems a bit more expensive than 8.5x.
Title: Re: LVNTA - Liberty Ventures
Post by: scorpioncapital on May 11, 2018, 11:16:04 PM
The rationale of the deal was the close the charter discount by spinning off a tracker into a standalone corp. Hopefully the Alaska operations stub won't be a drain on the valuation tucked away inside for the major asset stakes.
Title: Re: LVNTA - Liberty Ventures
Post by: Spekulatius on May 12, 2018, 05:18:23 AM
The rationale of the deal was the close the charter discount by spinning off a tracker into a standalone corp. Hopefully the Alaska operations stub won't be a drain on the valuation tucked away inside for the major asset stakes.

GLIBA does not look simple at all, in fact it’s almost impenetrable. After each “simplification” , the remaining entities seem more complicated than they were before. I am guessing that this is the classical Dr. Malone playbook :o
Title: Re: LVNTA - Liberty Ventures
Post by: Munger_Disciple on May 12, 2018, 09:18:13 AM
Per my calculations, Maffei was using the acquisition price of GCI in the calculation of NAV. They paid an EV multiple of 8.5 x normalized EBITDA of $330M which I think is reasonable for a Quad play, monopolistic cable company.

I think they paid $1.12B for GCI, but GCI only made just short of $20M in EBITDA (or Dr. Malone’s Version of it), so it seems a bit more expensive than 8.5x.

Your GCI EBITDA number is off by an order of magnitude and I suggest you redo your homework. GCI was doing close to $300-$330M prior to the recession in Alaska, and I expect them to achieve this number in the near future. You can also read the merger proxy for further details.
Title: Re: LVNTA - Liberty Ventures
Post by: stevevri on May 12, 2018, 09:59:39 AM
Per my calculations, Maffei was using the acquisition price of GCI in the calculation of NAV. They paid an EV multiple of 8.5 x normalized EBITDA of $330M which I think is reasonable for a Quad play, monopolistic cable company.

I think they paid $1.12B for GCI, but GCI only made just short of $20M in EBITDA (or Dr. Malone’s Version of it), so it seems a bit more expensive than 8.5x.

The $20M figure only includes the results of GCI from March 9th through March 31st. Page 31 of the 10-Q shows the Pro Forma Results as if GCI was apart of GCI Liberty the whole quarter. The Adjusted OIBDA is $70.188 million in that scenario.
Title: Re: LVNTA - Liberty Ventures
Post by: Spekulatius on May 12, 2018, 10:11:29 AM
Per my calculations, Maffei was using the acquisition price of GCI in the calculation of NAV. They paid an EV multiple of 8.5 x normalized EBITDA of $330M which I think is reasonable for a Quad play, monopolistic cable company.

I think they paid $1.12B for GCI, but GCI only made just short of $20M in EBITDA (or Dr. Malone’s Version of it), so it seems a bit more expensive than 8.5x.

The $20M figure only includes the results of GCI from March 9th through March 31st. Page 31 of the 10-Q shows the Pro Forma Results as if GCI was apart of GCI Liberty the whole quarter. The Adjusted OIBDA is $70.188 million in that scenario.

Yeah, just realized that. The purchase price does not account for the assumed debt, which I think is in the order of $1.7B


The projection from the filing is below:


    2016A       2017E       2018E       2019E        
            
            
    
Wireless

    $   81       $   93       $   114       $   120       $   117   
Pay TV/Cable

        101           105           119           124           127   
Enterprise

        89           109           117           121           121   
Denali Media(4)

        1           1           2           3           14   
​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​
Total EBITDA(5)

    $   272       $   309       $   353       $   368       $   378   
​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​
​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​
​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​   ​
% Margin

        29.1   %       32.0   %       35.3   %       36.2   %       36.5   %

Total Revenue(2)

    $   934       $   965       $   1,000       $   1,016       $   1,035   
Total EBITDA(2)(3)

        288           321           365           380           391   
Title: Re: LVNTA - Liberty Ventures
Post by: Liberty on June 12, 2018, 05:01:47 PM
https://www.businesswire.com/news/home/20180612006453/en/GCI-Liberty-Announces-Proposed-Private-Offering-Exchangeable
Title: Re: LVNTA - Liberty Ventures
Post by: mbrock77 on June 12, 2018, 05:41:44 PM
Could someone explain what these are/what the point of them is?
Title: Re: LVNTA - Liberty Ventures
Post by: Broeb22 on June 12, 2018, 06:11:15 PM
Check this link out for more on exchangeables. Slide 26,38,39

http://files.shareholder.com/downloads/AMDA-GY7JI/0x0x964599/0AB37271-43ED-4252-B0D0-CBBFF288C00A/2017_Investor_Day_-_Liberty_Interactive_QVC_Group.pdf (http://files.shareholder.com/downloads/AMDA-GY7JI/0x0x964599/0AB37271-43ED-4252-B0D0-CBBFF288C00A/2017_Investor_Day_-_Liberty_Interactive_QVC_Group.pdf)
Title: Re: LVNTA - Liberty Ventures
Post by: scorpioncapital on June 13, 2018, 12:15:45 AM
I take it, unlike a regular loan where you must pay it off in cash, with these they can pay them off in Charter stock, so they can take advantage of if they think it's overvalued, or perhaps there may be a tax benefit on in-kind dispositions?

Title: Re: LVNTA - Liberty Ventures
Post by: Liberty on June 13, 2018, 05:31:15 AM
It's a way to be tax efficient, I think. Doubt they think CHTR is overvalued, having just bought back 12% of the shares last year at higher prices.
Title: Re: LVNTA - Liberty Ventures
Post by: chrispy on June 13, 2018, 06:41:16 AM
So they must be thinking charter is less undervalued than their tax rate?
Title: Re: LVNTA - Liberty Ventures
Post by: Liberty on June 13, 2018, 06:43:36 AM
So they must be thinking charter is less undervalued than their tax rate?

It depends when the debentures are exchanged. It's not now, and they probably don't expect CHTR stock to stay this low forever.
Title: Re: LVNTA - Liberty Ventures
Post by: scorpioncapital on June 13, 2018, 11:13:53 PM
https://seekingalpha.com/pr/17191762-gci-liberty-inc-prices-private-offering-415-million-1_75-percent-exchangeable-senior

28 year term to be exact. I think there's a good chance there will be period of over and undervaluation over such a long term :)
Title: Re: LVNTA - Liberty Ventures
Post by: dwy000 on June 14, 2018, 12:42:15 PM
Am I reading it wrong or is this basically just moving the cash back to Qurate while keeping the tax benefits?  The use of cash is to pay the indemnity that GCI has given to Qurate for the same Charter convertible securities. 

Super confusing.
Title: Re: LVNTA - Liberty Ventures
Post by: thefatbaboon on November 09, 2018, 08:12:11 AM
Quite disappointed by GCI. They just lost 10% of their oibda in one fell swoop with the rural housing adjustment. And the one off step down with the mobile contract last year has not resulted in a return to growth as management said it would. Plus video customers have started declining at 10%. Hope the alskan economy improves soon.
Title: Re: LVNTA - Liberty Ventures
Post by: Munger_Disciple on November 09, 2018, 10:52:30 AM
I agree that the most recent GCI results are sub-par. However the main cause for the drop in EBITDA is due to a reduction in rural healthcare (RHC) revenues due from the government because of FCC decision. GCI is appealing the ruling. It seems to me that while this is negative for the company, it is not due to mismanagement; plus there is a possibility for a resolution in company's favor. Worst case, GCI can reduce the rural CAPEX and just concentrate on the urban and oil exploration areas. Both consumer and business data revenues seem to be fine. Video is a problem for almost every cable co, especially  a tiny one like GCI due to high content costs and cord cutting/shaving. So this is not a surprise.

Here is the real value in GCI Liberty: If you assume that the equity value of GCI is zero (Ventures just acquired GCI equity including preferred for $1.2), GLIBA is still trading at a discount to NAV assuming there would be no taxes paid on equity holdings, which given Malone/Maffei history, is a safe assumption.

No wonder Maffei just bought back $50M worth of GLIBA during Q3.
Title: Re: LVNTA - Liberty Ventures
Post by: Munger_Disciple on November 09, 2018, 11:04:07 AM
I just sent a request to Sanjeev to change the name of this thread to either GLIBA or GLIBA/LVNTA.
Title: Re: LVNTA - Liberty Ventures
Post by: Gamecock-YT on November 09, 2018, 11:09:31 AM
Aren’t they coming up on the end of the deadline for GLIBA and LBRDA to avoid merging?
Title: Re: LVNTA - Liberty Ventures
Post by: Munger_Disciple on November 09, 2018, 11:16:01 AM
GLIBA has been a public company for less than a year. This one year clock expires in early Q2 2019, at which point I expect GCI Liberty and Liberty Broadband to merge. Eventually the end game is for Charter to acquire the combined entity and get rid of all the complexity. GCI fits like a glove for Charter.
Title: Re: LVNTA - Liberty Ventures
Post by: Munger_Disciple on November 09, 2018, 11:22:17 AM
BTW both LBRDA and GLIBA have been conducting a joint investor conference call for the last two quarters to discuss results.
Title: Re: LVNTA - Liberty Ventures
Post by: thefatbaboon on November 09, 2018, 11:31:53 AM
Did not mean to suggest mismanagement. Just a horrible energy dependent market and a few misfortunes. But still money is money even if it vanishes through fcc fiat.

I know you are just putting it forward as an exercise but I would not nonchalantly write off gci. First, most of the money we paid for gci was in Lvnta stock issued at a huge discount to charter...between 30% and 40% (depending on your valuation of the exchangeables). Second, 20% of what would be left in your zero value gci world would be tree and while I like it it’s not exactly what I had in mind when I bought a cheaper charter. Personally I hope Gci is worth close to what they paid.  Otherwise I would have preferred continue with the lvnta tracking structure buying back stock with the cash flows from qvc for the exxhangeables shield.   

Anyway...wonder how tree plays...obviously got nothing do with charter

Title: Re: LVNTA - Liberty Ventures
Post by: Munger_Disciple on November 09, 2018, 11:45:06 AM
Did not mean to suggest mismanagement. Just a horrible energy dependent market and a few misfortunes. But still money is money even if it vanishes through fcc fiat.

I know you are just putting it forward as an exercise but I would not nonchalantly write off gci. First, most of the money we paid for gci was in Lvnta stock issued at a huge discount to charter...between 30% and 40% (depending on your valuation of the exchangeables). Second, 20% of what would be left in your zero value gci world would be tree and while I like it it’s not exactly what I had in mind when I bought a cheaper charter. Personally I hope Gci is worth close to what they paid.  Otherwise I would have preferred continue with the lvnta tracking structure buying back stock with the cash flows from qvc for the exxhangeables shield.   

Anyway...wonder how tree plays...obviously got nothing do with charter


You are right that I am taking GCI equity to zero as a thought experiment. I think you are missing the bigger point of my comment. All I am saying is that at the current prices you are getting GCI for free and more. This is meant to show there exists a substantial "margin of safety" in the current GLIBA price. Naturally I don't think GCI equity is worth $0, but much more.

In terms of what you would have preferred to own (LVNTA or GLIBA) doesn't matter now. It is all water under the bridge.
Title: Re: LVNTA - Liberty Ventures
Post by: thefatbaboon on November 09, 2018, 01:16:05 PM
Did not mean to suggest mismanagement. Just a horrible energy dependent market and a few misfortunes. But still money is money even if it vanishes through fcc fiat.

I know you are just putting it forward as an exercise but I would not nonchalantly write off gci. First, most of the money we paid for gci was in Lvnta stock issued at a huge discount to charter...between 30% and 40% (depending on your valuation of the exchangeables). Second, 20% of what would be left in your zero value gci world would be tree and while I like it it’s not exactly what I had in mind when I bought a cheaper charter. Personally I hope Gci is worth close to what they paid.  Otherwise I would have preferred continue with the lvnta tracking structure buying back stock with the cash flows from qvc for the exxhangeables shield.   

Anyway...wonder how tree plays...obviously got nothing do with charter


You are right that I am taking GCI equity to zero as a thought experiment. I think you are missing the bigger point of my comment. All I am saying is that at the current prices you are getting GCI for free and more. This is meant to show there exists a substantial "margin of safety" in the current GLIBA price. Naturally I don't think GCI equity is worth $0, but much more.

In terms of what you would have preferred to own (LVNTA or GLIBA) doesn't matter now. It is all water under the bridge.

 Using a 270m EBITDA a 6.5 turns valuation just covers the debt and pref, ie zero equity like your “worst case”.  For what it is worth 6.5 is about the value given to liberty global, lilak and most telcos. Not sure why anyone would be so confident that a tiny cable co in a one trick economy in a deep recession with a declining population should be worth more. I am actually hopeful and hold a lot of gliba but I object to the way you say it, like it is a savage worst case scenario type thing - it is not.

Gliba is not some huge +30% discount situation like lsxm currently or lvnta pre deal. It is somewhere between 15% and 20% and that’s assuming the lbrd is look through to chtr, gci is worth cost and an investor is willing to have approx 15% gross assets in tree at 30 times EBITDA. Anyinvestor who is new to the story and is not “tax committed” to gliba from lvnta/qvc shouldn’t rush to gliba for the extra small discount if they are not comfortable with gci and tree. The discount isn’t enough to short out tree without a timeline  like one could do with Expedia.  And neither is the discount big enough to be nonchalant about the value of large components of value like gci and tree.

You might be right to upbraid me for being whistful over lvnta pre deal as it’s all in the past!. But hey I know no other way to learn from the past other that to look at what happened in context of what might have happened if other decisions had been made. Obviously that kind of hypothetical stuff has its own significant limitations but I’m not sure there’s any other way to reflect on or judge management or investment decisions.

Anyway as you say, water under bridge, we are where we are...any thoughts on Tree? What happens to our stake when these liberties start rationalising?
Title: Re: LVNTA - Liberty Ventures
Post by: scorpioncapital on November 09, 2018, 01:35:28 PM
Gci is a can - an asset bought to spin off a tracker to a real company to narrow a trading discount. Assuming it was purchased at fair value I would discount it all together.
Ironically the discount did not close. Notice that the Maffei line of closing the discount rarely happens. Maybe a little...I think his thesis is a little bonkers.
Charter buying gliba or lbrdk is essentially a large block share buyback.
Gliba has a few other tech venture companies in it. Some are not too bad.
Maybe in the future it will be a platform for something or it will disappear.
Title: Re: LVNTA - Liberty Ventures
Post by: Munger_Disciple on November 09, 2018, 05:08:54 PM

 Using a 270m EBITDA a 6.5 turns valuation just covers the debt and pref, ie zero equity like your “worst case”.  For what it is worth 6.5 is about the value given to liberty global, lilak and most telcos. Not sure why anyone would be so confident that a tiny cable co in a one trick economy in a deep recession with a declining population should be worth more. I am actually hopeful and hold a lot of gliba but I object to the way you say it, like it is a savage worst case scenario type thing - it is not.

Gliba is not some huge +30% discount situation like lsxm currently or lvnta pre deal. It is somewhere between 15% and 20% and that’s assuming the lbrd is look through to chtr, gci is worth cost and an investor is willing to have approx 15% gross assets in tree at 30 times EBITDA. Anyinvestor who is new to the story and is not “tax committed” to gliba from lvnta/qvc shouldn’t rush to gliba for the extra small discount if they are not comfortable with gci and tree. The discount isn’t enough to short out tree without a timeline  like one could do with Expedia.  And neither is the discount big enough to be nonchalant about the value of large components of value like gci and tree.

You might be right to upbraid me for being whistful over lvnta pre deal as it’s all in the past!. But hey I know no other way to learn from the past other that to look at what happened in context of what might have happened if other decisions had been made. Obviously that kind of hypothetical stuff has its own significant limitations but I’m not sure there’s any other way to reflect on or judge management or investment decisions.

Anyway as you say, water under bridge, we are where we are...any thoughts on Tree? What happens to our stake when these liberties start rationalising?


I am hopeful that Maffei and GCI management (Duncan & Pounds) can turn around GCI ops, so that is where my non-zero GCI valuation comes from. But if GCI is a 0, so be it. I simply look at it as a free GCI equity call option in perpetuity plus all the other publicly traded equities. The main (perhaps the only) reason to own GLIBA/LBRDA is to own Charter at a discount. There is also a decent chance that Charter will pay 8-9 times multiple for GCI part of GLIBA in the next couple of years especially if then can clean up GCI and rationalize the capex and operating expenses.

If you believe what LVNTA paid for GCI then the GLIBA is trading at a discount to look-through NAV of around 22%. If you think GCI equity is worthless, then GLIBA trades for a look-through NAV discount of around 9% or so, similar to LBRDA discount to NAV. The reality is probably somewhere in between.

I am not thrilled with TREE but I am willing to ride Maffei's coattails with it. He seems to be quite bullish about TREE given that he bought more TREE this year. I would have preferred if he bought more Charter with the capital. TREE's valuation is a risk and you make a good point about it. I don't think owning LBRDA/K reduces the risk given that they will most likely merge with GLIBA. If you don't want to take the risk with GCI or TREE, your best bet is to own Charter directly.

When you invest in a Malone controlled entity, you always have some risk that decisions are not made in the best interests of minority shareholders. For instance, LILAC totally overpaid for Cable & Wireless (Malone was a shareholder of both).

In terms of TREE stake, my guess is that LBRDA will merge with GLIBA first, and then split off evite, TREE stock, some debt and other non-cable stuff into a new company. The rest of the combined company will be exchanged for Charter stock I think.
Title: Re: GLIBA/LVNTA - GCI Liberty
Post by: thefatbaboon on November 09, 2018, 07:17:39 PM
Hmmm not sure about your numbers. Without getting into the absolutes... just look at the differential you give for gci being worth what was paid compared to gci being worthless: 13%. So you are saying that a 1.2b swing in value translates to a 13% reduction in nAv?

Regarding TRee I guess you’re right although I wonder why they left it in gliba if that’s the case. Why not let it stay with qvc Until ready for its own tracker or spin.
Title: Re: GLIBA/LVNTA - GCI Liberty
Post by: Munger_Disciple on November 09, 2018, 07:27:37 PM
Hmmm not sure about your numbers. Without getting into the absolutes... just look at the differential you give for gci being worth what was paid compared to gci being worthless: 13%. So you are saying that a 1.2b swing in value translates to a 13% reduction in nAv?

Regarding TRee I guess you’re right although I wonder why they left it in gliba if that’s the case. Why not let it stay with qvc Until ready for its own tracker or spin.

The deal value of $1.14B includes $175M of preferred stock (The deal was struck at $27.50 in GLIBA shares plus $5 preferred stock for each GCI share, there were 35M GCI common shares outstanding at the time of merger). So GLIBA common equity value was roughly $1B.

I honestly don't know why TREE is a part of GLIBA not QVC, or why they bought it in the first place.
Title: Re: GLIBA/LVNTA - GCI Liberty
Post by: thefatbaboon on November 10, 2018, 02:29:58 AM
They got it originally as part of a much larger IAC investment (that also owned expedia, ticketmaster (now merged into live) and HSN (recently bought outright by q). Liberty was a big shareholder when Diller spun these out over the last 15 years. Tree was a tiny part of a big group of assets. Now they added a little bit one or two times I think more recently so they obviously think it’s a good business. I’ve no problem with it (not that anyone cares either way!) but I think it’s an exciting business.

Title: Re: GLIBA/LVNTA - GCI Liberty
Post by: vince on November 10, 2018, 09:39:22 AM
They got it originally as part of a much larger IAC investment (that also owned expedia, ticketmaster (now merged into live) and HSN (recently bought outright by q). Liberty was a big shareholder when Diller spun these out over the last 15 years. Tree was a tiny part of a big group of assets. Now they added a little bit one or two times I think more recently so they obviously think it’s a good business. I’ve no problem with it (not that anyone cares either way!) but I think it’s an exciting business.

Me too, I think Tree may surprise a lot of folks and be a significant driver of GCI value, certainly has lots of potential
Title: Re: GLIBA/LVNTA - GCI Liberty
Post by: Munger_Disciple on November 10, 2018, 09:57:58 AM
They got it originally as part of a much larger IAC investment (that also owned expedia, ticketmaster (now merged into live) and HSN (recently bought outright by q). Liberty was a big shareholder when Diller spun these out over the last 15 years. Tree was a tiny part of a big group of assets. Now they added a little bit one or two times I think more recently so they obviously think it’s a good business. I’ve no problem with it (not that anyone cares either way!) but I think it’s an exciting business.


Thanks, that makes sense. I am fine with Maffei's take on TREE and I hope he is right. I own GLIBA as a CHTR proxy at a discount with some free options thrown in just like everyone else. 
Title: Re: GLIBA/LVNTA - GCI Liberty
Post by: Munger_Disciple on November 12, 2018, 10:17:14 AM
Regarding GLIBA discount to NAV, Maffei said the following in the prepared remarks segment of the Q3 conference call:

So starting at GCI Liberty. During the quarter, we initiated share repurchase at GCI Liberty and from the period of August 1st through October 31st, we repurchased over $50 million worth of stock. We're doing this to take advantage of, what we call, the double discount on Charter, assuming a full discount to Liberty Broadband and GCI Liberty and you look through to where Charter is trading, the discount is in the low 20% range. And when you look at the Charter, look to price as of today's close, it was about $260 a share of Charter, so we consider pretty attractively buying GCI Liberty at these prices.

In effect Maffei is saying that buying GLIBA is like buying Charter at $260 per share on Nov 8th. Charter closed at $324.65 on Nov 8th. So GLIBA discount on Nov 8th to NAV according to Maffei is roughly 20%. Working backwards, this means that Maffei still thinks that GCI has an enterprise value of roughly $2.5-2.6B FWIW.
Title: Re: GLIBA/LVNTA - GCI Liberty
Post by: Gamecock-YT on March 05, 2019, 04:49:21 PM
Coming up on the magical one year anniversary of the merger: MARCH 9, 2019

Part of me wonders since there's the double discount still in place if it makes sense to keep GCI and Broadband separate and keeping buying back the GCI stock? At some point if/when the discount collapses, then it would make sense to merge the two companies?


Maffei at the last CC said:

Quote
So starting at GCI Liberty, at the corporate level we continued share repurchases. The November 1 and January 31, we repurchased over $100 million worth of stock. We aim to take advantage of the double discount at GCI Liberty, the low and the low Charter price. That double discount is because look through with the discount GCI Liberty has Liberty Broadband and then turn Liberty Broadband has to Charter.

To-date is you look at that double discount, we've effectively repurchased a Charter in average look through price of around $270 and that look through price today is up to $290 and obviously Charter itself is considerably higher. So we're excited about trying to take advantage of both, the growth in Charter and that double discount.

Title: Re: GLIBA/LVNTA - GCI Liberty
Post by: SI on March 05, 2019, 05:39:36 PM
Issue there is there isn’t a ton of cash flow. They did $101mn buybacks in that holiday period which is ~35-40% of their annual ebitda, fcf obviously being much less.
Title: Re: GLIBA/LVNTA - GCI Liberty
Post by: scorpioncapital on March 06, 2019, 01:23:01 AM
My experience with these kinds of companies - or even majority owned single companies is discounts fluctuate but almost never close. Only the end to the control or see through structure will.

Title: Re: GLIBA/LVNTA - GCI Liberty
Post by: WayWardCloud on November 12, 2019, 11:57:06 AM
Does anyone have a guess why GLIBA is up 5.23% today while Charter is down 0.17%, LBRDA is down 0.13% and TREE is up 1.81%?

Any news about General Communication/the Alaskan economy/the FCC rural help regulation that I missed maybe?
Title: Re: GLIBA/LVNTA - GCI Liberty
Post by: NotSoWise on November 12, 2019, 01:06:04 PM
GLIBA results call was on 11th Nov. In short Alaskan business did reasonably well - worth to read quarterly call transcript for more details. Other smaller contributions possibly were LendingTree valuation mentioned on the call and potentially discussion about growing discount to NAV.
Title: Re: GLIBA/LVNTA - GCI Liberty
Post by: WayWardCloud on November 12, 2019, 02:33:03 PM
Thank you!
I didn't realize the call happened after market close yesterday ::)
Title: Re: GLIBA/LVNTA - GCI Liberty
Post by: Shooter MacGavin on November 12, 2019, 03:26:39 PM
I think the bigger reason for the stock move is that Citi upgraded the stock and pushed the price target up to $80 from $76. I think the results were ok.  Alaska was less of a horror show than usual.  They didn't buy any GCI stock even though there is a meaningful NAV discount because they are too levered.  In hindsight owning CHTR directly would have been a waaaay better buy.  I think Liberty f'ed up on this GCI asset.  They should merge it with Liberty Trip and qurate and rename the ticker to LSHITK.
Title: Re: GLIBA/LVNTA - GCI Liberty
Post by: NotSoWise on November 12, 2019, 10:56:47 PM
Not sure that pushing target up by 5,26% by one analyst would make the price go up by 5,17%. In the first place, Citi upgrade was raised due to the reasons mentioned earlier in the post.

Do you think that CHTR was better buy than GLIBA assuming the discount to NAV at some point in time will narrow to 0%?
Title: Re: GLIBA/LVNTA - GCI Liberty
Post by: vince on November 13, 2019, 10:26:36 AM
Does anyone have a guess why GLIBA is up 5.23% today while Charter is down 0.17%, LBRDA is down 0.13% and TREE is up 1.81%?

Any news about General Communication/the Alaskan economy/the FCC rural help regulation that I missed maybe?

the operating business within gliba is starting to turn positively, and the discount to net asset value had grown to be unusually large
Title: Re: GLIBA/LVNTA - GCI Liberty
Post by: Agrippa07 on March 16, 2020, 07:00:44 AM
Down almost 50% today (Charter - 11%) at market opening - anyone know what might have triggered this? (Margin call?)
Title: Re: GLIBA/LVNTA - GCI Liberty
Post by: jgyetzer on March 16, 2020, 07:25:11 AM
I don’t know why, but it seems to be halted.  I can’t get an order filled...

Edit:  It’s back up.  No nearly as exciting as before😞
Title: Re: GLIBA/LVNTA - GCI Liberty
Post by: scorpioncapital on March 16, 2020, 10:15:25 AM
Could it be the tree sub investment?
Title: Re: GLIBA/LVNTA - GCI Liberty
Post by: NotSoWise on March 16, 2020, 10:46:51 AM
Most likely lots of market price sell orders combined with low liquidity - and then halted trading to balance supply/ demand. CHTR may be doing buybacks so its price decline % wise may be lower than GLIBA. When things stabilize CHTR / GLIBA ratio may return to normal (taking aside Lending Tree).
Title: Re: GLIBA/LVNTA - GCI Liberty
Post by: jgyetzer on March 17, 2020, 07:43:03 AM
Discount to CHTR, LBRDA keeps increasing.
Title: Re: GLIBA/LVNTA - GCI Liberty
Post by: WayWardCloud on March 17, 2020, 08:04:16 PM
Care to share your numbers on the discounts at LBRDA and at GLIBA Jgyetzer?
Title: Re: GLIBA/LVNTA - GCI Liberty
Post by: jgyetzer on May 10, 2020, 03:11:58 PM
I'm getting 24% discount to NAV for GLIBA and 15% for LBRDK.  If you could collapse the LBRDK discount, then GLIBA would be 30% off.

All of that is of course ignoring taxes on investment gains as per Malone doctrine😬.  I simply applied GCI purchase price.  Could argue that should be higher or lower.
Title: Re: GLIBA/LVNTA - GCI Liberty
Post by: Gamecock-YT on June 30, 2020, 05:51:06 AM
It’s finally happening. 8-K this morning.

a potential business combination transaction between Liberty Broadband and GCI Liberty (the “Potential Combination”), in which Liberty Broadband would acquire all of the outstanding shares of Series A common stock, Series B common stock, and Series A Cumulative Redeemable Preferred Stock (“GCI Liberty Preferred Stock”), of GCI Liberty in a stock-for-stock merger. The Possible Exchange Ratio, which remains subject to the negotiation of mutually acceptable transaction agreements, would consist of (i) 0.5800 of a share of Liberty Broadband Series C common stock for each outstanding share of GCI Liberty Series A common stock, (ii) 0.5800 of a share of Liberty Broadband Series B common stock for each outstanding share of GCI Liberty Series B common stock, and (iii) one share of a newly issued series of preferred stock of Liberty Broadband (“Liberty Broadband Preferred Stock”) for each outstanding share of GCI Liberty Preferred Stock, with the new Liberty Broadband Preferred Stock bearing substantially identical terms and conditions to the GCI Liberty Preferred Stock.
Title: Re: GLIBA/LVNTA - GCI Liberty
Post by: Munger_Disciple on August 07, 2020, 09:07:54 AM
https://www.businesswire.com/news/home/20200806005929/en/Liberty-Broadband-GCI-Liberty-Announce-Proposed-Combination

Definitive merger agreement between Liberty Broadband & GCI Liberty. Fairly large break-up fees in the agreement which means this is essentially a done deal. Given the shared C-suite, there was never any doubt anyhow.