A breakup of Liberty Media and the fate of its three tracking stocks are major issues that the company will likely address at its annual investor day on Thursday in New York, reports Barron's.
Liberty Media, controlled by media and cable TV magnate John Malone, is the only major company whose assets are attributed to three tracking stocks.
They are Liberty SiriusXM Group which holds an 80% stake in Sirius XM Holdings (SIRI) and a 32% interest in Live Nation Entertainment (LYV); Liberty Formula One Group, which holds the Formula One racing business, and Liberty Braves Group, the holder of the Atlanta Braves baseball team.
Investors aren’t crazy about tracking stocks since they don’t offer direct ownership of the underlying assets. For years, however, Liberty has been paralyzed to change that, because its only actively traded business, or ATB, has been the Braves. This has prevented spinoffs since both the surviving company and the spinoff need to be ATBs.
That is changing. Formula One will become an ATB in early 2022 on the fifth anniversary of its purchase by Liberty. The Berkshire deal, in which Liberty swapped its Liberty SiriusXM tracking stock for shares in Sirius XM, put Liberty’s ownership of Sirius above the 80% threshold.
That is important because Liberty can now consolidate Sirius’s financial results and receive dividends tax-free from Sirius. Liberty Media CEO Greg Maffei said on the company’s recent conference call that Liberty believes that the Sirius stake now constitutes an ATB given the way the Berkshire deal was structured.
Investors likely will get a better idea about all these issues Thursday.
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