Yet Another Value Podcast - $LBTYK: can Liberty Global finally spin to win? | Stock Spin-Off Investing's Rich Howe

Episode Date: May 10, 2026

Rich Howe of Stock Spin-Off Investing makes the bull case for Liberty Global ($LBTYK): cheap on a sum-of-the-parts, an upcoming Ziggo spin to crystallize value, and a hidden ventures portfolio. Andrew pushes back hard on Malone, Fries, and Liberty's long history of value that never quite shows up.Chapters:00:00 Introduction and Liberty Global thesis01:44 Sponsor: AlphaSense earnings season04:49 Rich's bull case for $LBTYK07:46 Andrew on management credibility09:05 Why a spin can unlock value11:57 Buybacks: are they actually working?15:19 Debt structure and the deleveraging path17:14 Operational deterioration risk19:52 Ziggo's subscriber losses24:09 Malone and Fries: the track record27:46 The Liberty Global board problem31:22 The growth investment portfolio32:59 Why Rich haircuts the portfolio36:43 Formula E and venture exposure38:35 The empire-building risk40:55 Virgin Media O2 restructuring42:11 Other spin-off setups worth a look43:40 Ziff Davis sum-of-the-parts46:52 Andrew on distressed SaaS ideas48:22 Lionsgate and media consolidation51:53 Lionsgate as an acquisition targetLinks:Yet Another Value Blog: https://www.yetanothervalueblog.comStock Spin-Off Investing (Rich Howe): https://www.stockspinoffinvesting.comLegal disclaimer: https://www.yetanothervalueblog.com/p/legal-and-disclaimerProduction and editing by The Podcast Consultant: https://thepodcastconsultant.com/

All right, hello and welcome to yet another value podcast. You're about to listen to an episode, well, I guess I should say, with yours as me, Andrew Walker. You're about to listen to an episode with Richel from Stockspinoffinvesting.com. We are going to talk about Liberty Global. The ticker there is LBTYK. As always nothing on this podcast, Investing Advice, Full Disclamor, show notes, end of the episode, all that sort of stuff. Look, I think you're going to find it interesting. LBT Liberty Global is the company that has killed 100,000 million value investors.

It is, as always, crazy interesting right now. If you believe the company, the stock is trading at $12 per share. They've got $10 per share of investments on their balance sheet. They've got $5 per share of cash on their balance sheet. And they're about to spend off a business that they're arguing is going to be worth $12 to $15 per share. And they have another business in there. So it is crazy interesting on some of the part story. But as you're going to hear me push back on rich and talk about and think about,

I've been burnt 100 million times before and I'm worried I'm going to get burnt again. And there are some troubling signs over at good old Liberty Global. And, you know, John Malone, he still has the voting chairs. And I don't know if he's really plugged in here. And you'll hear a lot of other pushbacks here. So it's a really interesting conversation. Then at the end, we're going to talk about a couple of other interesting spinoff situation. So, you know, if you're following spinoffs, I'm a subscriber.

I'm happy subscriber. Rich does great work covering every spinoff that is happening in the market that is upcoming and all that type of stuff. So we're going to get there in one second. But first, a word from our sponsors. Today's podcast is sponsored by Alpha Sense. Look, earning season is coming up. It's basically already here as I'm recording this on April 20th.

And earning season is tough. There are, you know, you're following dozens of companies you're following the companies you're investing in. You're following all the companies that tack on to the companies you're invested in. And it takes a lot of time. You know, there's the famous story of when you're on the sell side, the earning season, it is your super wall. Late nights if you're on the sell side, buy side, pretty late nights as well when

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I'm your host, Andrew Walker, with me today. I'm happy to have on from Stockspinaw.com. I think for the second time, my friend Rich, how's it going? Hey, what's going on, Andrew? Thanks for having me, man. Really excited to talk today. Before we hop into that, quick disclaimer, remind everyone, nothing on this podcast is investing advice.

Always true. See the disclaimer and the show notes are at the end of this podcast, if you want a reminder of that. Rich, look, Rich run Stockspinoss.com. I'm a subscriber. You can go, listen, I need a way to track on top of the thousand other ways. I track all the spinoff, so I need a way to track it. And Rich is my guy for that.

Every time there's a spinoff about a week before, I get a nice little overview of exactly what's happening and everything. Rich, the company we're going to talk about today is a serial spinner, I would say. They're a serial spinner. They're also the bane of many value funds existence, including sometimes my own. So I felt a little personally traumatized when we said we were going to talk about this. But the company is Liberty Global. The ticker there is LBTYK or LBTYA, depending if you want to get.

nasty with the K shares or the A shares, but I will pause there and ask you, what is Liberty Global and why are they so interesting right now? Yeah, of course. And then I just wanted to correct you. So stockspinoffinvesting.com, not stock spinoffs.com. Oh, man, I just did a promo for a competitor, didn't I? But you know what? I think I think stock spinoffs is a good site, too. So I recommend them as well. I think you got some good stuff there. So any I will make sure you include the correct link in the show notes. That is embarrassing. I think I just thought spinoffs. Okay, go ahead. Of course. Yeah, so Liberty Global.

So I reached out to you and I said, you know, I'd love to talk about Liberty Global and you said, sounds good. Let's do it. So basically the pitch in a nutshell is that this is a sum of the part story with a hard catalyst where I think you're going to get the majority of the value back that the stock price is currently reflecting within 18 months to two years. As you know, and many value investors know, Liberty Global has been a sum of the part story for a very long time.

The strategy that John Malone has had is to basically consolidate and scale up. Many of the European telecoms using, you know, cheap debt, use that to shield tax liability, generate a lot of free cash flow. And, you know, hopefully that would work out well. It really has not worked out well over the past 10 years. But what got me really excited about it is that about two years ago, Liberty announced that they're going to be basically changing their strategy. They're going to be breaking up. So the first step of that was to spin off their Swiss telecom business called Sunrise Communications. So, you know, I got involved that summer.

And, you know, since then, the spin-off has taken place. Sunrise communications has not been, you know, it hasn't been a home run, but it's performed well. And, you know, since the time of that initial announcement, Liberty Global plus the shares of sunrise is up about, you know, 40%. So not home run by any means, but not bad, beaten the market by a little. bit. Step two of the transaction or step two of this plan is that they're going to be spinning off a company called the Zigo Group, which is based in the Netherlands. They're going to be merging that joint venture with another business that they own in Belgium. And long story short, I think that that business should be worth maybe $12 to $14 a share right now as we're recording.

I think liberties around $12 or maybe even under $12. And then the next question, obviously, is what is the stub worth? So Liberty, although when you pull it up on Yahoo Finance, it looks like it has a ton of debt. All that debt is actually at the subsidiaries level. There's no debt that's recourse to Liberty Global. They do have $1.5 billion of cash or about $5 per share. They also have $10 of private and public investments. But even if you haircut those private and public investments by 50%, just because we don't know whether those are going to be profitable investments or not, you get $10 of value between the cash and the investment. So $10 plus $12 from Zigo Group, get you $22.

And then VMO2 is another JV, which is their biggest telecom asset. And that's a highly levered asset. But I think even at a minimum, it's worth probably about $3. And so, you know, long story short is stock trades at $12 today. I think it's probably worth $25 to 30. And you're going to get a hard catalyst within 18 months where you're going to receive shares in the spin-off. So that's kind of the pitch in a nutshell.

That was a great pitch. And I think the fun thing about Liberty Lobo is like, it is impossible to talk about without bringing up the history. And I will say one of the things that worries me is even the management team, you know, they come out and I reread as we were prepping for this, I reread the Q4 call, the Q1 call, and they did a thing at New Street. They don't, and this is Freeze, who's the chairman who's been here for, he doesn't really talk about the operating metrics a lot.

He comes out and he's hammering the sum of the parts. He's hammering all this capital allocations off. And I do worry that, you know, when, I mean, every time a company, I love the decks where they publish, hey, here's there some of the parts. And about a year ago, I realized I have never invested in a company that said, our stock is at 10, here's the sum of the parts that is worth 20. I've never invested a company that's published at some of the parts deck and made money in it. Like literally never.

So I guess my first question to you, before I get there. A next way to frame would be, I like to say the market's a competitive place. What are you seeing that the market is missing that makes this a risk-adjusted opportunity? I'll slightly modify it. The market is a competitive place. Management is beating you over the head with, here's our value, here's our value, here's the value. We're going to spin and realize, we already spun and realize, why is the market not believing

them or what is the market missing that makes this an awful opportunity? Yeah, so I'd say from my perspective, why I think it's an alpha opportunity. So I would say that, you know, my specialty, I'm not, I'm not a sector, specialist by any means. You know the telecom sector, both in the U.S. and Europe a lot better than I do. But I think my edge, what I have a lot of experience with, is just looking at companies that are announcing spinoffs and evaluating whether or not a situation is, in fact, going to unlock value. And I think the situation here, it's clear to me that value is going to be unlocked. And the reason why is we'll run through the math. But if Zigo Group is a publicly traded company,

And if they do hit, do what they're going to say they're going to do and hit the operating metrics that they say they're going to hit and pay the dividend that they've hinted that they're going to hint, hit. You know, I think it's hard to imagine a scenario where it's not trading it like $10 or $12 or $14. So I think in the situations that I like in terms of spinoffs that have been announced where there's clear going to be a value unlocking event is when there's two companies. There's not like a massive company and a tiny little company. In those situations, as you know, you're probably going to see some indiscriminate selling situation. But in this case, both of these companies are going to be multi-billion dollar companies that can be owned by, you know, really any portfolio manager that currently owns Liberty Global. So I don't think there's going to be like a sharp indiscriminate selling situation.

And then I think they're going to pay a dividend. They've learned that sunrise, the dividend was incredibly important to the sunrise equity story. So they're going to pay a dividend for this Zigo group, which investors are going to anchor. to. I've seen that time and again, contour brands, Jackson Financial, Thunggela resources, all these companies signaled, hey, we're paying a dividend. What does that do? It gives investors confidence. It also signals that management is really confident in its free cash flowability. And it's super simplistic, but I've just seen time and again that that's a really crystal clear way to unlock equity value. And then the stub is going to have, it's going to be like,

okay, well, you have stub liberty now. You have $3.4 billion of investments. You have one and a half billion dollars of cash, that's got to be worth something. And then you have this other Virgin Media business, which is highly levered, and we can talk about that. It has a lot of structural challenges. We can talk about that. But, you know, it generates about 10 billion pounds of of revenue, you know, four billion pounds of EBDA. And they're going to be de-leveraging that. And then the other reason why I think this is an alpha opportunity is just because like when I talk to people, it's like, oh, yeah, that's interesting. But like, why do I want to wait around until the end of 2027, right? Like, who wants to wait around till then for like, why can't I wait until

Q1 of next year? And maybe that's the right pushback. And maybe I should. But like, I just don't have conviction when the market's going to start paying attention. But I think eventually it will. You know, the other thing, and people hear this throughout the conversation as I'm talking to you. And I texted a few people who followed Liberty Global for a long time alongside me and said, hey, I'm doing a podcast on Liberty Global. I'm brushing up. Talk me out. You know, did it work for them? No, but maybe it'll work for me now. Like, talk me off this bridge because it looks really darn cheap. Some of the parts are, and all of them talks about, we're just like, I can't do it with Mike Freeze again.

I just cannot do it with him. So I think that might be another thing, and we'll get there. But let me ask a starting question. A long-time listeners will know capital allocation. I love capital allocation, all this sort of stuff. You read, the first thing, if any listener goes and reads Mike Freeze's last conference call and the new straight appearance, he says we are capital allocation animals. We are highly focused on capital allocation.

I think a direct quote was, it will surprise no one who's followed Liberty Global that we are highly focused on capital allocation right now. And one of the things they talk about is cutting the corporate overhead, which is awesome. But the thing that jumps out to me, you know, they're coming and hammering the sum of the parts story, right? And he says what you said, $10 per share of Liberty Growth, and we'll talk about the value there, $5 per share of cash, you get Zigo for free, you get V-O-2 for free. They're not buying back shares. And it's not just that they're not buying back shares. You know, historically, Liberty Global was the share repurchase. You know, they were hammering the share account.

And then they took it down. You know, in 2025, they buy back 5% of the stock. And this year, they're buying back 0% of the stock. It's like, well, you know, if you really are convicted that you've got $15 for share of financial assets plus all your operating assets. And, you know, the capital structure is just so perfect that nothing can bleed through. So it's all like really firm value. I would just ask these highly sophisticated guys, why aren't they buying back shares? Yeah, so my answer to that is they need to conserve basically what they're doing,

as from my perspective, is they are getting every dollar that they can to de-lever. They need to de-lever Zigo Group, and then they need to de-lever VMO2 because every dollar that they use to de-lever Zigo Group is going to translate directly to equity value. Let me push back there because, again, one of the nice things is, and you mentioned up front, if you view this on Yahoo, Finance, Bloomberg, whatever, because it consolidates, you're going to say, oh, this is a really levered company. But what they would say and what I believe, and I think what most people believe is they're structured in silos, right? The famous, hey, bad co-co, and I'm not saying actually Zigo and Bada or Bad Fones, but

badcos, but those have all of the debt, and it's not recourse to the parent. And what they're saying, and again, I believe this, $5 per share of cash at the parent, $10, for share of growth ventures at the parent, all the debt is non-recourse at the operating sums. So I do hear you on, hey, all of the cash flow is going to pay down debt. But I would say, hey, that's the subco that is paying down the debt, right? So there's two things that happening, that's happening. Either A, with this $5 per share of cash, they're not buying back shares at the top co, which I think is a mistake. Or B, even worse, not only they're not buying back shares, they're taking topco cash to pay down subco debt, which is highly inefficient and actually transferring

firm value from the top co, which could be used to buyback shares at this huge discount. So you just, it strikes me as disingenuous a little bit. Yeah, I think that's fair. I think that's totally fair. I mean, I think I would love if they bought that. I mean, they have the billion and half of cash. I would say that the biggest, and then they have apparently $3.4 billion of private and public investments, you know, even if you haircut that, that's substantial value. And some of that is public like Lionsgate and ITV. And so that, you know, they theoretically could sell that to just buy back Liberty global stock. And I think that would be a great use of cash.

I think, I guess the way that I'm thinking about it, and I think the biggest pushback that I've gotten is in terms of Zigo Group is the business right now, it's kind of hard to figure out exactly how much debt they have. But according to management, they have between, you know, low five to mid fives of debt. And so they basically can't, they couldn't spin this asset out if it has five and a half turns of debt into the public markets. Like I don't think the reception would be particularly good. So they are very focused on getting the debt from four, five and a half turns down to four and a half turns. And how are they doing that? They're basically all the cash flow they're generating at Zigo Group and at telling that they're

to use that to basically pay down debt. They're also going to sell some of their infrastructure assets, you know, like wire and some of the towers and wire in some of the towers to generate, you know, the guidance that they've given is $1.2 billion of proceeds to pay down debt. And so the thought process is, hey, you take debt down from 5.5 times to 4.5 times. We have a much better equity story. That's a good use of cash. And then, you know, especially if we pay a dividend, that's going to translate directly to equity value once we spin this thing out. But you're right. I mean, you're right. If they believe, if they believe that some of the parts, and I think they do, for better or worse, I think they believe the sum of the parts is a lot higher, they should be buying

back stock right now, especially when they're kind of on the precipice of this value creation event. Yeah, I mean, look, I can yell at you all I want about it. You can yell at me all you want about it. We're just yelling into the wind, right? So let me ask you another. So another thing. And again, I worry because Mike Freeze, I want to talk Mike Freeze's history in a second, but I really get worried when he comes on these investor calls and, you know, his script is all, here's the sum of the parts. We'll talk about the growth portfolio, but here's the sum of the parts. We've got all this cash for this great value. And the company seems much more focused on kind of the financial engineering or at least he does than the business performance. You know, it's not awesome. When I was reading the Q1 call halfway through, I stopped and it was like, okay, I know they think Zigo should be valued at, uh, 11.5 times, 11.5% free cash flow yield, but they have not mentioned once how Zigo is performing anything. I worry about that. And if I broke, get back again, I'm a long time Malone follower to my chagrin. I had the worst investments I've ever made over time if you bucket them all together would be the Malone compacts. And it's not lost to me that a lot of what they're talking about,

now you do have the bucket at silos and everything, but a lot of what they're talking about of, hey, we should value Zigo group at an 11.5% of it's how John alone has gotten in trouble over the past 10 years. You know, I remember in 2019, him calling, hey, Discovery Communications is a free cash flow machine. Yes, but it's a dying free cash flow machine because it's tied to the cable bundle. I remember in 2021 at Liberty Investor Day, he came out and said, I think the best value of my portfolio is Q-rate, Q-B-C. And that's one of the times where everything flipped for me because I was like, dude, Q-rate might generally like cash, but that is a structurally declining business in a lot of trouble.

I don't think a 20% cash flow, like, I don't know if it's going to be here in five years. And here we are five years later when they're filing for BK. Now, there's still a business there, but it was one of the worst investments ever. And I guess what I'm trying to come to. Charter, I think is a lot the same thing. I worry that Malone and the people around them got so focused on, here's the free cash flow number that they forgot that, especially in telecom, your free cash flow number is a trailing metric. And your financials kind of take time to come through, right?

Like, I could show you a cable company that stopped all their capax, and you looked at a trailer number, and you're like, oh, it says 40% pre-capture turning. But all the subs are just about to start churning because we're way behind. So what I'm saying is, I worry they're so focused on the Zigo group and all this sort of stuff to, like, kind of taking their eye off the ball. And we're focused on some of the parts number, but I don't even know how the core business is doing. I don't know if they know how the core business is doing. So I threw a ton of history background out. You serve as my armchair psychologist here. No, I think this is really, really good, really good color.

And it's funny because I, yeah, I, I, yeah, I, so basically I'm, I mean, this is, this is really good feedback and good, good to talk about, because I, the sum of the parts, like I'm a spin off investor. Like, that's what I look at. I look at the sum of the part story. And I know that, you know, some of the part stories are very dangerous. And I've learned that they can be extremely dangerous unless you have a hard catalyst to unlock that value. So in this case, we have a heart catalyst. If it were going to be a tracking stock or

if it were going to be a partial spinoff, like I would be a lot less excited. I probably wouldn't be excited. But the point that I'm excited about is that it's going to be 100% spin off. So Liberty Globe is going to own 90% of this business and they're going to spin off 100% of that stake. And so for better or worse, they're going to force the market to value this business independently. I could be wrong. It could not work out. The stock could be valued a lot lower than I think it's going to be valued. But for better or worse, we're going to find out. In two years, in two years, we're going to find out. And then in the meantime, we have, you know, we have $1.5 billion of cash and $3.4 billion of investments on the portfolio. So that adds a nice lever of kind of downside protection

for me. In terms of how the actual business is doing. So basically, and I, again, am not a cable expert. I'm not a European telco expert. But from the research that I've done, basically, Zigo Group has been struggling. So they, the biggest competitor and the European market in the Netherlands is KPN. KPN has been investing heavily in fiber. They've been overbuilding their fiber network. This has resulted in basically them being able to attract additional subscribers at lower prices, which has resulted in ZIGO group, basically hemorrhaging broadband broadband customers.

So that's a problem. So what has Ziggur group done about it? So about in 2024, they brought in a new CEO and May of 2024, and they took a bunch of initiatives that appear to be working. So one, they had to adjust their pricing strategy. So I think ARPOO is still growing modestly, but they're, you know, doing promotional activity to attract new subscribers, to entice existing subscribers to stay in a little bit longer. They're renegotiating existing subscriber contracts.

And this has helped them reduce churn. they've simplified the offerings that they're offering to their customers. They've invested to improve the reliability of their network. They're going to be continued to do that this year, 50 million of OPEX, 50 million of CAPEX. They've also partnered with a company called Delta Wholesale, which basically gives Zygro group access to 600K of additional Netherlands, which allows the Zygdor Group to say, anywhere you are in the Netherlands, we have a plan for you. in that they were able to strike a deal with Delta wholesale to do that without investing any cap X. And so all these plans that they've done have resulted in net broadband subscribers. They're still losing subscribers, but the losses from a year ago have improved by 75%.

So it's- The way you're supposed to say it is the second derivative has slowed. I think it's the way we're supposed to say everything. The trend, the net, yeah, I don't know how they say it on the call. they say it a lot, lot better than I do. But basically, a year ago, they were losing 30,000 subscribers per month. Every sequentially, that trend has improved. They only lost 8,000 subscribers in the current quarter,

and they're hoping with additional investments that they should be able to basically be stable to slightly growing. And so, you know, from my perspective, I would say that's the biggest thing that I'm worried about. You know, you asked me ahead of time to kind of think of risks. What is the market worried about? What am I more worried about than the market? I'm not worried about de-leverging.

De-leveraging something that I think they can do, even if they have to, they have a bunch of cash and investments on their balance sheet that they can use to de-lever. But I guess what I'm most worried about is those trends. Like, do those trends continue in the right direction? And I think they need to for this to be a successful spin-off. I think the business has to at least be stable

because that was the case with Sunrise. It wasn't growing like Gangbusters, but it was at least pretty stable. Again, I worry I bring in too much baggage to this because I will tell you, I remember Bern Hobart and I did a podcast on John Malone's memoirs last year. And the CEO you leave that he speaks most highly of is Mike Freeze.

And I look at this and I look at the stock price over the past 15 years. And you're like, I just, I don't understand how we can speak so highly a freeze and like look at the stock price. Now, the other counters to that is like pick a great company that was in 2000, was around 2000. The stock price was probably flat over the next 15 years if you were lucky because starting evaluations matter, but I don't think that's quite the case here. Like, I don't think this company has really covered themselves in glory. Yes, the multiple is depressed. But I just have trouble because I look at the results and then I look, this is a controlled code, right? Malone controls it right now and Fries can buy the control from Malone once Malone dies. Now, I don't know if Fries has the money for that,

but I kind of look at it and say, do I want to ride with Freeze with this track record? And he he gets in a room and he is awesome, right? He's talking about everything value investors want to hear. And this is why this has been the widow maker for value investors for 20 years. But, you know, he lives in Denver, I believe, Liberty Global. It is all European assets. And again, I worry that he's doing too much financial engineering. And I know a lot of people have said, hey, man, like, they're never going to create value

in a telecom, which is a politically sensitive beast when the CEO lives in Denver. And he's got all these subs. So I'll pause there. I have one more Andrews just like arm share psychologist, Rich, talk me through this. But I'll pause there if there's any points on that you wanted to talk about. No, I think that's a really good point. I think all those points are valid. I would say the reason, you know, everybody, you know, we all read, you can be a stock market genius.

And, you know, Malone was on the, it was in the, in the outsiders is one of the living outsiders. And he is a tremendous, incredible track record of, you know, creating shareholder value. But you're right. like over the past 10 years, it's, it, that hasn't been the case. I will say that the reason, I will say personally, like a lot of, I know that Greenblatt said that like when there's complexity, you know, the Marriott spinoff with, with Malone, and he structured it with the rights offering, like the more complexity there is, that's a sign that he's trying to create value in that these trees, he's trying to rig the game in his favor.

But I've, I've honestly, a lot of the stuff that Malone's done, I've just said, I can't understand it. I don't. Maybe it's like higher level than that I can understand, but it's too complicated for me. I'm not, I don't feel comfortable investing because I just don't understand it. But I would guess, but I guess the difference here is that it's, it's just pretty clear what they're doing. Like, whether or not the CEO is in Denver or not, I think, I think separating the assets is just a, a situation that makes 100% sense, no matter who the CEO is. And then I'll say another thing as it really is. sentiment. So if you look at value investors club, so Liberty Global has been written up a million times, but not, as I said, it's the windowmaker, man. This is the true widowmaker. But not since 2018. So I think a lot of value investors have gotten burned and are like, I'm not, you know, I don't want to, I don't want to talk about Liberty Global. And so, you know, it's been eight years since then written up on Vic. I don't know if that's a, that's a good sign or not, but it could be

a sign of sentiment. I think, I think there, I think you're looking at the A shares because there was a, there was a Liberty Global write-up in August of 2020. So it's been a lot. Okay, I was. I was a yeah, yeah, yeah. Let me ask one more question before. I do want to talk about that growth portfolio because I think that is like the big flux here. But just last question.

I'm sorry to keep harping on the manager. But one thing that worries me here is the bore. So Freeze does own a decent bit of stock. Now I would say, hey, a lot of this is owned through stock options. and like he's been the CEO for 20 years, you'd hope he owns a decent bit of stock. But when I look to this board, I feel bad because I've thought in my, you want to put my activist on days being like, hey, different boards who have 84-year-old board members being like, this is their retirement project.

There's no way that they're totally dialed in. I don't want to be ages, but, you know, it strikes me sometimes. And when I look at this board, I see, hey, director since 2010, 70 years old, retired from her operating role. directors since 2005, 72-year-olds, director since 2002-23, 69, director since 2005, 80 years old, director since 2005, 86-year-old. What I guess I'm trying to drive to you is like, oh, director since 2008, 88 years old. You know, there's not a lot of stock ownership on this board, at least in my opinion. I think, especially given the tenure of directors, you'd hope it would be a lot higher. And I worry that you've got a staggered board and a controlled company where all the directors

are, many of them are legends inside the industry, but they're all past 80. You know, these guys, I worry that you're doing these financial spinoffs, and especially the growth portfolio, which you're going to talk about, where they're basically operating as kind of a either a venture growth company or a private equity company. I worry you've got this old board of legends who are all kind of chummy. You know, this is kind of their last skin in the game, not in terms of investment, just in terms of board membership and stuff. And I worry that you're just not going to get a lot of pull.

pushback here. And you're kind of, we've got 15 years of this company being flat and these board members have ever seen it. And what's the definition of insanity? The definition of insanity would probably be me being the thousandth investor to get burned 17 times on Liberty Global. So how do you kind of think about that, Dan, yeah. Yeah, I mean, I think it's valid. I think it's valid. I mean, Malone by himself, he's 85, right? I don't even think he's on the board anymore, is he? Yeah, maybe he's not even not even on the board. But yeah, I mean, I think it's, I think it's, I guess it's, yeah, I mean, I guess you're not going to have a lot of confidence that people who have been on the board for, you know,

10, 15, 20 years and they've kind of presided over, over value destruction. So yeah, I mean, I think that's, I think honestly, that's a, that's a fair, fair pushback. I mean, I guess, I guess from like an independent perspective, like maybe I don't have confidence in them making the right decision. And maybe I'm too focused on financial engineering because I'm a spin-off guy. But like from my perspective, it just makes sense. So I like the strategy. And I like the strategy because it's different from what they've done. Like Malone has his other vehicle, his GSI Liberty vehicle. And like I think that one's interesting too. But the pitches, I understand it, is Liberty, you know, he has this Alaskan telecom asset. He's going to use these

cash flows to basically buy, to create his own, his new Liberty Global. And I'm like, okay, Malone, maybe he'll make some good acquisitions. But I think it's easier to make money when you're breaking things up. So I have a lot more confidence, I guess, in Malone breaking things up. And then the marketing market being forced to value things independently as opposed to relying on him to create value as an 85-year-old guy, you know, through Eminet. You say you is like it's in the future. But we're talking May 5th, happy Cincoa Mayo. We're talking May 5th.

Last week, I think. Glibba came out with the acquisition, so they're consolidating the Alaskan cable space. So there has been news there. And I know I just don't love the Alaskan cable space, but I know people who follow it, I think it's a pretty true deal. Let me ask you on, so we've alluded to it a few times. You know, the sum of the parts. And again, you can go look.

It's like page five of their investor deck, right? They'll walk you through the sum of the parts. The sum of the parts are roughly, and correct the numbers if you want, $10 for share of this growth venture portfolio, no debt against it. So, you know, non-recourse. And interestingly, I believe they mentioned, they're going to start charging that growth portfolio a management fee, which to me is kind of, you know, taking from one hand to pay to the other since there's no outside investors. But it could pretend different interesting things going forward. So they've got the growth portfolio. They've got $5.6 per share of cash at the Holdco. So 10 plus 5, 15, what's called?

Stock is under 12 right now. So right there, we're getting at a discount of those. And then you've got top goes. The place I want to focus on the growth portfolio. In the growth portfolio, they have Formula E. They've got some legacy investments in Lionsgate and a few others, but I'd love to just talk how do you think about the valuation of the growth portfolio? Because these are private marks for the most part, right? How do you think about the valuation? How do you get comfortable there? Because if you said, hey, that I've certainly invested in a company that said, we got a private mark, it's $10 per share. And then they come out and it was like, actually it was a dollar per share. Like, that is kind of the swing difference in this is a huge margin of safety versus you

you know, it's kind of fairly valued. How have you gone and comfortable with that? What's in there? Yeah. So the way that I think about it is I just, I just haircut it all by 50%. So like I, they say they have $10 a share of value. And I just say, okay, let's just assume for my valuation purposes that that's worth $5 a share.

So that's how I think about it at a high level. They have, they don't call out as far as I know, they don't tell you exactly how each of these assets is marked. I think they did. And tell me if I'm wrong. I'm the unit core they mentioned Deloitte Fair Values them, right? Yes, exactly.

Yep. Yeah. And I don't know if Deloitte individually valued each individual assets, but I think Deloitte valued all the assets and created a, $3.4 billion valuation for the portfolio, but maybe they did. Maybe I'll look through that and then see if they've valued each individual asset. I'd have to imagine they did just because, like,

it would be very strange if they just said, oh, it's a role worth $3.4 and they weren't. A, I believe the top five investments are 65% of the value. So it'd be kind of aware if you weren't at least fair value in the top five investments. So, but I don't know. Yeah. So the way I think about it and is basically like Formula E. That's the Formula one for about for electric cars.

I think that generates about $200 million of revenue, at least in 2024, I believe. I don't know if I have the 2025 numbers. I think Formula One, I'd have to double check, but I think that's valued at like two times to movie, three times revenue. And so I think like a valuation for Formula, Formula E around, you know, 400 to 600 million seems kind of reasonable. In terms of their other, you know, big, big assets that they have, they have Atlas Edge, which is an Edge data center platform. This was formed with Digital Bridge in 2021. That's got to be a pretty valuable asset. I think that's one of the top five.

Let's see. I'm just checking my notes for the other big assets. Edge Connect X, that's another U.S. Edge Data Center business that Liberty has monetized some of that. But I think that's probably considered one of their top five assets. They have a business called Plume, which is a Wi-Fi mesh and connected home business, which I think is another one of their top five business. And then in terms of the public assets, Lionsgate is, I think, worth about $100 million.

And I think they have like a decent stake in ITV, which is worth about another $100 million. But I think those four or five are probably the biggest, the biggest drivers. And to be honest, I don't have, I don't have tremendous insight. I mean, you know, the way that I think about Formula E, yeah, Formula One, Formula One is a massive a massive business. It has grown incredibly. Yes, Formula E could be really interesting. Right now, like I think it lost revenue in 2024. I think it's still generating a decent operating a decent operating loss, which is not unexpected. Could it be massive? Yes. Do the car sound really cool? Yes. But it's one of those things where I just really have very little conviction.

I mean, they haven't, I haven't been able to find out like what the IRA of their private investment portfolio is. Of course, they call out, hey, we monetize X, Y, and Z. We got a 30, 35% IRA for this investment, that investment. You know, we've monetized $1.6 billion of investments over the past five years. So I think there is value there, but it's just really hard to hang your hat on anything. And so the way that I've approached it for better or worse is, let's just call it, give it a 50% discount and call it a day. Yeah. No, look, all makes total sense. I just worry like, so putting aside the valuation, which I think is difficult. Like, I do worry that you've got this company that's a telecom company.

And I'm not saying they don't have some specialty, but, you know, allegedly, Malone has said this before with Formula One, he had both Mike Freeze and Greg Maffa. And I think one of the other entities, maybe he was wondering for this, all we're looking to acquire Formula One. And if anyone who got that, I mean, it would have been a grand slam, right? But I do worry, like, you've got this company where the top guys have absolute control and don't own, I mean, free zones a lot of stock, a lot less than I'd hope he did, and a lot of it's through options.

Like, to say he's never bought stock in the open market would be a lie, but to round it and say he's never bought stock on the open market would be directionally correct and he has not bought in the past five years. I worry they've got this big portfolio and they're turning themselves into a basically a private equity sports firm, and they like to say we've got successes, but I worry that this is how you get hold code discounts pretty quickly, right? If it wasn't in Liberty Global, and it was just in a random company and there were no spinoffs, if I was like, hey, 3.4 billion inside this portfolio, they've got no skills, and they're going to buy it, like, 50% discount,

70% discount, you know? So not that it's not fair value, but like just the hold co-control discount, especially guys who pay themselves this well historically. So I'm not as much worried about the fair value, though I will note they keep saying Deloitte fair valued it. And I did some look, and I can't find anything that shows the Deloitte fair value or the, you know, even just the top five investments, here's the value here's how we got them. I can't find anything that supports that. So they just kind of throw it out there. But I really worry about just the what they're doing here and kind of the end game for that. Oh, no, I think that I think it's completely fair. Yeah, I mean, you do not want, as a sum of the parts investor, like you, you do not want,

you know, a lot of disparate assets. Basically, the simpler, the better. And you're going to trade at a massive discount, right? Unless you spend out the assets to investors or unless you monetize them in some way. And then just like, to your point, on the call, you probably read it. They said, hey, it looks like you were snooping around to buy an NBA franchise in Europe. And they were like, oh, yeah, we look at everything that comes our way. And so clearly, they're not like wanting down that portfolio, right?

No. So it's, yeah, it's a very fair point. And could an NBA franchise in Europe be interesting? Yeah. But, you know, there's going to be, what is your skill in acquiring this, right? Like, if you and I went and bought a, I'd love to buy the New Orleans Pelicans, right? You and I, we could go sign it. But what's your skill in acquiring it?

Well, we were the high bidder. With an NBA franchise, I mean, maybe the NBA once, is, looking for top dollar right up front, they want a telecom company to come in because the telecom company is kind of going to push the sports rights and stuff. I could potentially see how you could say that, but I don't know. In a digital world, do you really need the telecom company? There's probably a lot more. I just don't know. So yeah, it's just my worry is when you've got these companies, and this is the worry with Paramount Buying Warner Brothers. You know, any, these are trophy assets. And if you're using kind of other people's money, it's very easy to talk yourself into it and say, I'm a

great acquire. I can do this. And by the way, I buy the NBA Europe franchise, I'm going to get invited to all the NBA fund stuff and everything, you know? So that's my big worry. Look, I just, I think it's fascinating. As I was re-brushing up on this for this, again, I was texting my friends. It's like, God, you've got, you know, half the market cap is just cash. And then you've got kind of the full market cap at what they're saying is in the growth investments. And then you've got all the Opco businesses and you got the spin-off company. I was like, I have a 0% position right now. Why is it a 20%? Like, why isn't this the best thing we've ever seen? And then all of the psychosis that I'm sure the listeners are listening to pops up.

So I'll pause there. Anything else you want to talk about Liberty Local? I do want to ask you a few just other random stuff while I've got you. No, I mean, I guess the only other thing that we didn't really talk about is VMO2. So that's arguably, that's a very highly leveraged asset. so they have like five and a half turns of debt. You know, if there is, I think it seems to me that they're going to spin off this Zigo Group by the end of next year. And then once they do that, I think they're going to turn their attention to VMO2. There's a lot more here. I think the fundamental story is even less encouraging than Zigo Group.

I think there's some more headwinds in that market. There's a ton of leverage, but they're doing basically the same thing that they're doing with Zigo Group, which is selling the infrastructure type assets to de-levering. And then you can, you know, once you do spin off that asset, you could sell it off. There were rumors in the press that tell, that, I think, teleph, not telephonic, maybe it was Telephonic, whoever their JV partners for the VMO2 was thinking about buying that business for like a very high enterprise value last year. And Liberty Global popped when that happened.

Telephonic has a ton of debt. So like, I don't think the shareholders necessarily wanted that. But that's another leg of the stool where I see, you know, maybe $3 at a minimum to, like kind of like $15 of value. But again, you'd have to get a lot of, you'd have to sell a bunch of the infrastructure assets to pay down debt to get that equity value. I'm just laughing because, you know, again, for those of us with long, long members, VMO2 is the merger of Virgin Media and O2.

And, you know, this was for, if I remember correctly, Malone talked about getting the banana out of the jar, I think is how we framed it, where you needed to merge Virgin and 02 to because the, this is UK assets. The UK assets were too overbuilt. You needed to merge them to get the operational synergies. And they finally did it. And here we are five years later and it's a mess. And we still need to get the banana out the jar in some way.

So hey, well, I've got you here again, you are stock spinoff investing.com. I'll get it right this time. Love to just talk. What else are you seen in the stock spinoff world that's kind of catching your eye, got you interested? Yeah. What else? So I'm trying to think, what are the high conviction idea?

that I have right now. So let's think. Yeah, I'm trying to think. So, yeah, I mean, there's, I'm trying to think. There's a bunch of like really small stuff, which I don't necessarily want to talk about because it's like microcap stuff. I like Liberty Global a lot.

I like, I like Zip Davis is not really a spinoff situation, but it's kind of a company that is basically hip, hit by this kind of SaaSpocalypse, but they're selling assets. And I think that's selling it a big, some of the parts discount. So that's one that I think looks interesting. It is so funny. It looks interesting. It's so funny you mentioned Zip Davis because I was refreshing them on them this morning.

So for those who don't know, Zip Davis is a, you can correct me if I'm wrong. It's a hodgepodge of legacy online assets for the most part, and they do have some other stuff. But they announced the big sale. They were saying for months, hey, our assets are worth more than some of our parts, classic some of the parts, sorry. We're going to sell. We're going to realize it.

and no one believed them, or few people leave them, the market certainly didn't. And then in March, they announced the sale of probably their best division, their connectivity division, the Accenture for a massive, massive premium. And the stock has popped quite a bit, but I think the two interesting things about it, and you tell me if I'm wrong. I was refreshing on this morning, so I'm not quite there yet, but the two interesting things about it are, A, if you kind of adjust for some of the parts after the Accenture sale with the cash, and I haven't adjusted for taxes and expenses, everything,

but it still looks crazy cheap. Now, the remaining assets are not as good as the connectivity division, but it still looks crazy cheap. So you're crazy cheap. But the other thing that is interesting to me is once a company has sold one asset, you kind of can see where it's going, especially when it's a big asset like connectivity. And I would refer to the old Comscope group.

Last year they sold a big asset. And then just a week ago, the Remainco sells the majority of their assets, the ruckus networks or whatever. And I see that time and time again. NVRI, I know is one. I don't have a position in right now, but I know is one that I believe you've covered because there's a spinoff coming up.

They sold their best division and they've kind of got a Rump division. But once they do a taxable spinoff of the Rump division, you have to imagine that maybe they saw the Rump division. So as if Davis is, I'm glad you mentioned because I've been looking at it because I think it's interesting. Accenture will close in the next month or two.

And what happens to Tremco? I wouldn't be surprised if it's just sell, sell, sell and wrap this whole thing up. Yeah, the one thing that works me a little bit is they're still making acquisitions and they've made like three billion of acquisitions over the years. And like clearly that strategy hasn't worked out if you look at the current valuation. But they do say, they did say in the call, the stock at this point at the time of the connectivity sale was at like 45 bucks, I think.

And the commentary was this is great, but it's still not enough because to your point, I think they're still trading on a pro forma basis at like two and a half times EBITDA. And they basically said, hey, if our stock stays here, we're going to continue to to sell assets. So I'm hoping that they do that. And I was also kind of hoping that they would pay a big special dividends or just buy back a ton of stock after that connectivity sale closed, but they really haven't told us what they're going to do with the cash. So that's my one concern with Zip Davis, but I own it. Full disclosure, I own. I also own Liberty. But yeah, that's the only concern there. I think that one's, I think that one's pretty interesting. Yeah. No, look, again,

you kind of can see where the puck is going once they sell one. Maybe they go the other way, but I think that what they do with the cast will probably be the real tell. And then the other interesting thing, unless I'm misremembering, there is a mini activist there. So, you know, if they take the wrong step and the CEO does own quite a lot of, quite a good deal of stock. So I think you can count on generally decent alignment there. For sure. Yeah, I agree. And what about you?

Anything that you're, I think looks interesting these days? And this kind of, any anything, but especially special situations? Well, especially situations are fast here right now. I mean, I've been really into this corporate dark arts thing. I think you're starting to see in the SaaS world, a lot of these companies where I was saying, hey, I want to see insider body. I want to see some type of signaling. You're starting to see some type of signaling in the SaaS world where the insiders are getting aggressive. And, you know, one I wrote up recently was RPD, which is a communications firm. Jana owns 10% and just got permission to take their ownership up to 20% of the company just

did pretty stock price-heavy targets to their management team. And it has just been a absolute victim of the SaaSpocalypse. They do security. I think their products probably aren't that great. The customer reviews I've seen had them think great. But, I mean, it is cheap, cheap, cheap. So this is, and full disclosure to everyone, I've got a tracking position there. But those are the type of things I've kind of been interested in just like the really bombed out, the really bombed out things.

You know, the other one, timeshares, I think, are really interesting. where especially VAC just gave their, see, time shares, I mentioned it to you, because all the timeshares are historical spinoffs, not current spinoff, historical, quite cheap, and you're starting to see a lot of them grant their top brass,

pretty upside skewed stock price and EBITDA targets after literally a decade of underperformance. So I think those are pretty interesting as well. What about, so I love, I love your Dark Rock series. You know, and you wrote about Lions Gate and Stars, which was really interesting, basically signaling that it, you know, it looks like Lion, you know, Lyon, everybody's gotten burned, burned on, on Lionsgate for many, many times,

but it looks like, hey, maybe this is the time that something actually goes through. And that basically they had granted very, you know, significant stock price grants at significantly higher prices than where Lionsgate and Stars were. So I thought that was, I thought that was super interesting. That post was to not go unnoticed at the Lionsgate HQ is. But no, I think, so I'm not as interested in, and people should go read the post. People should read everything I write five times in a row consecutively and maybe once a day for the rest of their life, obviously.

But I'm much less interested in Stars. I mean, I just, the media landscape is so tough. And yes, they might be able to acquire, yes. I mean, the nice thing about Stars versus Say, say, Versant is, Sars is a standalone company. People are choosing to pay for it. Now, they might have forgotten they have a subscription, but people are actively paying for it.

So I do think they can say, hey, we're not just protected by this legacy media bundle, and you've got the obscure there, but I just don't love that asset. Like, there's not that much of a reason to do this. I think Lyon is way more interested. I've been very tempted. You know, the only thing I would say is the history of media mergers

is you pay a big premium, and they're all really bad. as I was talking to a seat from inside arbitrage, as I told him when he was pitching Lionsgate along the spin, Amazon bought MGM for a huge price in Lionsgate, said, look at that price. Amazon, I don't think they would do the MGM deal again if they wanted to. Paramount Mike is probably going to get the Warner Brothers deal over the finish line. I think it's going to be a mess.

I think there's a potential BK. Netflix, look at their stock when they were going to buy Warner Brothers. Right, right. Lionsgate can keep saying look at the multiples, we're so valuable. Who's the buyer? Tell me who the buyer is. I think Netflix may have gotten religion again after that. I don't know who the buyer is.

I don't know who a buyer who would be happy after having invited is. And if you want to say Lionsgate versus Warner Brothers, I think if you go look at the Lionsgate portfolio of what they actually own, I think you get shot pretty quickly at how empty it gets. after you get through John Wick and kind of Hunger Games. Like the portfolio beyond that doesn't get that, you know, it doesn't have Harry Potter. It doesn't have Superman. Warner Bros. does. And once you start getting into that back portfolio, I don't know how valuable these legacy, all this legacy catalog really is, to be honest with you.

Yeah, I liked your, I liked your podcast with my buddy, accrued interest, where you guys were talking about Versant and Lionsgate. and I just appreciate the perspective on that from like two media guys. Well, you know, here's the thing, though. We were talking about for Sand. I think in the long term, they're in a lot of trouble, but I think we were talking low 30s and the stocks got like 41 today. So the other thing you have to remember is a price for everything, right?

And I mean, Jesus, that thing was hated and is hated. So, no, linescape is really interesting. I can see myself, I'm always really tempted to, but we've actually hit two of the ones I'm always really up to Liberty and Lionscape. And it's also like, hey, Andrew, you've been burned four times on Lionsgate and 10 times on Liberty Global. But, you know, why not 11 and 5? Yeah, maybe, maybe this is the time. Yeah, Lionsgate, I own Lionsgate.

I like it. I own it kind of pre-spin. And the thesis, I mean, I'm kind of getting to the point where I kind of want to catch out because my thesis was always that they're going to have a very strong fiscal year 27 because I think they have like the resurrection that's going to be hitting theaters. They have like another hunger game. Michael, you know, the Michael Jackson movie did. Michael's doing well. Yeah. So it's like, my thesis was like, hey, they're going to have strong box office results,

which you doesn't translate to like a DCF, but like it impacts the stock. And then on top of that, you're going to get, you know, merger speculation. And then in terms of who's the buyer, I mean, you know, accrued interest would agree with you that who's, you know, who who who's the natural buyer. But I, from what I've seen, there's so many big tech potential buyers. and do they want to buy? Who knows? And then there's also like a ton of private equity players. Like you look at Blackstone or Apollo or some of the other guys that could potentially

be buyers. Linesgate seems like a decent bite size. Where would I potentially sell? I mean, I think it's like you look at the targets where, which you wrote about, where the CEOs are getting paid out, like in the midteens or in the low 20s. So like I think of the stock gets there. Like I don't think it's a stock that you necessarily want a whole forever. Maybe it's kind of sell it into the sell it into the MNAer rumors.

Well, hopefully we get them at some point. Look, Rich, this has been great. I'll include a link to stocks spent off investing in the show notes. And it's been awesome. Going to have to get you a hat if I heard of this appearance. But include a link to the show notes. It's been awesome. We'll talk soon.

Thanks so much, Andrew. Appreciate it. A quick disclaimer. Nothing on this podcast should be considered an investment advice. Guests or the hosts may have positions in any of the stocks mentioned during this podcast. Please do your own work and consult a financial advisor. Thanks. Thank you.