Liberty Media To Remain Intact

Liberty Media CEO Greg Maffei signaled no imminent changes to the company’s three tracking stocks at the company’s annual investor day Thursday, reports Barron's.

 Liberty is unusual because its assets are represented by three tracking stocks, Liberty SiriusXM Group (LSXMA), Liberty Formula One Group (FWONA) and Liberty Braves Group (BATRK).

“We’ve always viewed them as transitory,” Maffei said of the tracking stocks, adding that “they are working for us now.” Liberty SiriusXM Group stock was off 3.8%, to $53.73; Liberty Formula One Group was up 22 cents, at $56.02, and Liberty Braves Group was down 1.1%, at $30.39. Sirius XM Holdings was off 4.6%, to $6.33.

The company is gaining more flexibility to spin off its tracking stocks into asset-based businesses. It has been hamstrung because its only actively traded business, or ATB, has been the Atlanta Braves baseball team. A spinoff and surviving company both need to be ATBs.

In early 2022, Liberty’s Formula One auto racing business will become an ATB after five years of ownership and Liberty believes its 80% stake in Sirius XM Holdings (SIRI) is an ATB after a stock swap with Berkshire Hathaway (BRK.A and , BRK.B) that put it over the 80% mark.

Greg Maffei

There has been speculation that Liberty might spin off the Atlanta Braves or potentially turn the Liberty SiriusXM Group into an asset-based stock. Both those developments likely would be viewed favorably by investors who prefer asset-based stocks to trackers.

Maffei has talked about the “optionality” or flexibility of having more ATBs within Liberty. He added that the Formula One tracking stock was reflecting a “full value” for that business and that Liberty Sirius XM Group’s discount to net asset value has been narrowing. It’s now estimated at around 25%, compared with about 35% earlier this year.

In response to a question, Liberty’s chairman and controlling shareholder, John Malone, said that companies should take advantage of “artificially” low interest rates to borrow money and extend the term of their debt.