Monday, May 18, 2020

Report: 'Cable Cowboy' John Malone Has A Great Investing Record

John Malone has hit plenty of investing home runs for himself and fellow shareholders over the years.

Now, according to Andrew Bary at Barron's, his media and cable empire, which includes the Atlanta Braves baseball team and Formula One racing, has been thrown a curveball by the pandemic that has shut down live events in most of the world.

But it is too soon to bench the 79-year-old investor, writes Bary.  Indeed, the recent setbacks offer investors a rare opportunity to play promising parts of the Malone empire at a big discount.

Take two of the three tracking stocks for his flagship Liberty Media operation: Liberty SiriusXM Group and Liberty Braves Group.

Liberty SiriusXM, whose chief position is a 72% interest in SiriusXM Holdings, trades at a near-record discount of nearly 40% to the value of its assets, which also includes a 33% stake in Live Nation Entertainment, the leading concert promoter. Its shares trade around $31, versus an estimated net asset value near $50.

Investments in live sports and entertainment properties like the Braves and Live Nation give Malone a competitive edge over traditional media content. Live events are less vulnerable to disruption by tech giants such as, Facebook, or Netflix.

Known as the “Cable Cowboy,” Malone made his fortune as a pioneer in cable TV in the 1980s and 1990s by building and then selling Tele-Communications Inc. to AT&T. The deal maker got back into the business in 2013, by buying into Charter Communications. He remains its most influential shareholder. Charter, No. 2 in cable to Comcast, has reported strong results in recent quarters thanks to growth in high-speed internet services.

According to Barron's Malone’s strategy is creating pure-play vehicles on the investments and businesses he controls, either through stand-alone companies or, when tax issues prevent that, tracking stocks.

He remains in the background, as chairman of Liberty Media and other Liberty companies, while entrusting day-to-day responsibilities to several highly paid managers. Chief among them is Greg Maffei, CEO of Liberty Media and other Liberty entities.

All in all, however, Malone has had an excellent batting average. Time for investors to step up to the plate.

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