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Seth Klarman Buys 25.5 Million Shares of Global Media Conglomerate Vivendi
Posted by: guruhl (IP Logged)
Date: April 17, 2012 01:40PM

Seth Klarman, founder and president of the Baupost Group which has returned 20% annually to investors, bought a stake in Vivendi (VIVHY), a major subscription-based digital entertainment company. Klarman’s Baupost Group owns 25,500,000 shares of Vivendi, or 2.04% of the company, as of Feb. 29, 2012.

Vivendi’s stock declined almost 42% over the last year and 22% year to date. In 2011, the company’s adjusted net income increased 9.4% year over year due to a turnaround at its Universal Music Group and excellent performance of Activision Blizzard and GVT, as well as the purchase of the remaining shares of SFR, its mobile-phone unit, from Vodafone in June.

Earlier in the year, Vivendi sold for more than $30 per share, higher than 2011 book value of $24.65 per share. The company also has a dividend yield of 9.9% and generated almost $5 billion in cash flow. It trades for a low P/E of 5.

On April 9, Klarman gave up on a large investment in Targacept (TRGT). He had purchased 6 million shares of the company at about $11.50 per share in the fourth quarter of 2011, and took at least a 30% loss when he sold out in the next quarter. The company’s share price had dropped significantly on news that it revised top-line results from its Phase 2 clinical study of asthma drug TC-6987.

This year Vivendi is planning to begin VOD service in Germany which could rapidly expand across Europe. It wants to set up a Netflix (NFLX)-style service where users pay a flat fee for unlimited access to streaming video content. The company is also seeking a replacement for CEO of SFR, its French mobile business, after it lost numerous clients to new competition.




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Re Seth Klarman Buys 25 5 Million Shares of Global Media Conglomerate Vivendi
Posted by: batbeer2 (IP Logged)
Date: April 17, 2012 01:30PM

LOL

Henry Schacht was way ahead of Seth on this one.



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Re Seth Klarman Buys 25 5 Million Shares of Global Media Conglomerate Vivendi
Posted by: vgm (IP Logged)
Date: April 17, 2012 01:46PM

"Henry Schacht was way ahead of Seth on this one."

Depends how you define "way ahead". Seth waited to swing and got a much better price.

I'd be interested in Henry's views on why Vivendi is down so much of late.



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Re Seth Klarman Buys 25 5 Million Shares of Global Media Conglomerate Vivendi
Posted by: batbeer2 (IP Logged)
Date: April 17, 2012 02:19PM

With investing, the early bird sometimes gets eaten by the cat ;o)
I too would appreciate an update by Henry.



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Re Seth Klarman Buys 25 5 Million Shares of Global Media Conglomerate Vivendi
Posted by: hschacht (IP Logged)
Date: April 17, 2012 03:22PM

My first reaction was to recall a quote I like (not sure who said it): "Being ahead of your time is indistinguishable from error".

My second thought was... that's why he's Seth Klarman and I'm not.

All this said, I see the beauty in Vivendi (especially at current prices) than I do in News Corp (which Klarman owns & I used to own) and the biotechs he likes to play with, which are well outside my margin of safety.

The thesis on Vivendi is unchanged. It is a mass of assets. And people are more focused on where it is (France/Europe) rather than WHAT it is.

I continue to hold Vivendi and I welcome Klarman to the fold. May he be the catalyst that I was/am not.




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Re Seth Klarman Buys 25 5 Million Shares of Global Media Conglomerate Vivendi
Posted by: vgm (IP Logged)
Date: April 17, 2012 03:40PM

I think you do yourself an injustice Henry - being ahead of your time can also be a catalyst or inspiration for others. The present discussion thread may be a case in point.

Klarman talks about how he sometimes can anticipate a third party being forced to sell a position in a particular stock, and that he can then capitalize on the price drop.

I had a question if I may: was there a particular reason why Vivendi suddenly sold off at the end of February and has continued to drop?



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Re Seth Klarman Buys 25 5 Million Shares of Global Media Conglomerate Vivendi
Posted by: hschacht (IP Logged)
Date: April 17, 2012 03:50PM

Vivendi bought SFR from Vodafone and it appears that competition in the French telecom market is tougher than originally thought. Macro issues + a new market entrant + regulation. The company's earnings did not meet expectations and they took a cautious tone about the year ahead.

A classic case of relative numbers trumping absolute numbers.

The cash keeps rolling into Vivendi... and it is amazing to see people ignore it.

Thanks,



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Re Seth Klarman Buys 25 5 Million Shares of Global Media Conglomerate Vivendi
Posted by: tonyg34 (IP Logged)
Date: April 17, 2012 03:54PM

Henry's consistently early, its on the list of reasons I like(d) his articles so much - you had time to think about it and still get in at or below the price at recommendation.



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Re Seth Klarman Buys 25 5 Million Shares of Global Media Conglomerate Vivendi
Posted by: glavacem (IP Logged)
Date: April 17, 2012 04:13PM

Guys, does vivendi only pay a div once per year?

sorry, im having a hard time getting info.



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Re Seth Klarman Buys 25 5 Million Shares of Global Media Conglomerate Vivendi
Posted by: hschacht (IP Logged)
Date: April 17, 2012 04:25PM

Dividend is once a year... go to the company website... not hard to get information, but you can't rely on Google Finance, etc. Venture out to the wider world of investor relations!

"Consistently early"... time to quit writing and start working on my timing!



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