Added more Liberty Media (LMCK)
I couldn’t help myself. Yesterday was the last day Liberty Media (LMCA) was trading before the distribution of Liberty Media C shares (2 Liberty Media C shares for each Liberty Media A share). The when-issued Liberty Media C shares (LMCKV) were trading at a 3% discount to the Liberty A shares for no apparent reason that I could think of. On top of that, when a stock split happens often the post-split shares trade up in value (again for no real reason… except for human nature). So we had a discount for the when-issued C shares AND the probability that the shares would trade up when the distribution happens today (July 24)… sounds like a no brainer for me, especially because I have wanted to own Liberty Media for a while. Nothing like a discount to make this shopper bite! Yet, it has to be noted that the situation with the Liberty shares is a bit more complex because the shares being distributed are a different class (C vs. A) and have no voting rights (though they do have the same economic rights). I don’t really think that the voting rights for the class A shares have any value because Malone controls the company with his supervoting B shares, so I discounted this seeming difference and dove in. Today will tell if my short-term thesis is correct. Not that I’m that interested in the short-term, mind you. I’m really interested in the unwinding of Liberty Media into the Sirius stake on the one hand and the new Liberty Broadband (Comcast, TW etc) on the other. That transaction will be in the form of a distribution of Liberty Broadband shares AND rights to Liberty Media A, B and C shareholders, and it should happen sometime in early fall. THAT’s the transaction I’m really interested in as it should ‘unlock some hidden value’, i.e. reprice the sum of the two parts upward. I’ll be taking a closer look at that transaction when the timing and final details are announced.