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IAC breakup - spinoffs

Has anyone been following this spin-off situation?

Looks like the value has yet to be realized and may be an opportunity. TREE is probably best to avoid since they are in mortgages, but TKTM looks very cheap with a P/B less than 1. TKTM PE ratio is well below the Entertainment industry as well. They are expanding in China and seemed to have handled the Olympics well.

Any thoughts?

I'm surprised how quiet this board is given the opportunity spin-offs present to the small investor.

Rating: 2.8/5 (28 votes)

Comments

kuuks
Kuuks - 5 years ago
Thanks for bringing this up Kiko. I also think there aren't enough special sit. posts on these boards. TKTM does look appealing given it's sell off and attractive ratios, however can you shed any light on the business?
Kiko81780
Kiko81780 - 5 years ago
Sure, if you attend concerts or different types of shows, you probably have come across Ticketmaster (TKTM). Everyone talks about expanding into China these days, but these guys handled the Olympics which gives me a little more confidence that they will actually be able to pull it off.

Here is their description:

Ticketmaster was incorporated in Delaware in September 1995. It was established in 1976. The Company was formerly known as Ticketmaster Online-Citysearch, Inc. Upon the closing of the Combination on January 31, 2001, TMCS changed its name to Ticketmaster. The Company is a live entertainment ticketing and marketing company. Ticketmaster connects the world to live entertainment. Ticketmaster currently operates in 20 countries worldwide, providing ticket sales, ticket resale services, marketing and distribution through its website. Ticketmaster served more than 10,000 clients worldwide across multiple live event categories, providing exclusive ticketing services for leading arenas, stadiums, amphitheaters, music clubs, concert promoters, professional sports franchises and leagues, college sports teams, performing arts venues, museums and theaters. Ticketmaster's distribution channels and client base provide it with scale Ticketmaster provides ticket sale services to the following types of clients: Venues, many of the most well-known arenas, stadiums, theaters, universities, colleges, clubs and festivals in the United States and abroad, ranging in size from 100,000+ seat stadiums to small clubs, including Madison Square Garden, New York City, Staples Center, Los Angeles, The, London, the University of Michigan and the University of California, Los Angeles; Promoters, promoters of live events, from worldwide concert tours to single, local events, including AEG Live, Jam Productions and MCD Productions; Sports Leagues, Teams and Events professional sports teams, leagues, franchises and clubs and special sporting events, including Major League Baseball Advanced Media and many Major League Baseball, National Football League, National Basketball Association, National Hockey League, Rugby Football Union and Premier League teams, as well as the 2008 Olympic Games and Museums, Cultural Institutions and Historic Sites including the Guggenheim Museum, New York City and the Getty Museum and Getty Villa Los Angeles. Consumers who purchase tickets through Ticketmaster pay an amount equal to the initial ticket face price, plus a per ticket convenience charge, a per order fee and, if applicable, a premium delivery charge. Ticketmaster remits the entire face value of the ticket to the client, plus, in most cases, royalties in an amount specified in the written agreement between Ticketmaster and the client. Ticketmaster currently offers ticket resale services through TicketsNow. Ticketmaster provides primary ticket sale services in Australia, Canada, Ireland, New Zealand and the United Kingdom, under the Ticketmaster brand name, and through other brand names in various other jurisdictions abroad, including China, Emma Ticketmaster, Denmark, BILLETNet, Finland, Lippupalvelu, Germany, Kartenhaus, the Netherlands, Ticket Service, Norway, billettservice.no, Spain, Tic Tack Ticket, Sweden, Ticnet and Turkey, Biletix. Ticketmaster also provides resale ticket services in Canada through TicketsNow and in the United Kingdom, Germany and the Netherlands through GetMeIn!. The Company experiences competition from other national, regional and local ticketing service providers to secure new and retain existing clients on a continuous basis. Ticketmaster is subject to a variety of statutes, rules, regulations, policies and procedures in various jurisdictions in the United States and abroad, which are subject to change at any time.
Kiko81780
Kiko81780 - 5 years ago
For what it's worth and those interested, TKTM has been crushed is the past few days based on this news:

http://money.cnn.com/news/newsfeeds/articles/apwire/5fba82fb70ede512c04ee8542e620713.htm
kuuks
Kuuks - 5 years ago
Hmmm yeah.. the problem is that now that Livenation is selling its own tickets TKTM is gonna lose 17% of its revenues. However, the forward P/E analysts are stating takes this into account. So a forward P/E of 10.6 is quite low. Opportunity?
Kiko81780
Kiko81780 - 5 years ago
With the P/E ratio well below 10.6, it could be a good deal. I've also read that the contracts are long-term and that this shouldn't affect TKTM for a few years.
kuuks
Kuuks - 5 years ago
TKTM is getting very cheap... I'm still in the slow process of understanding the risks involved with the business and more particularly the industry.

Two leading economists on the ticketing industry recently presented a case for not allowing TKTM to vertically integrate forwards by purchasing TicketsNow (they bought them in Feb) as it would give it monopoly status in original sale and resale of tickets. How strong is this monopoly? At the end of the day they are just creating software for event promoters to sell their tickets.

Just a couple of years ago they had ROIC of almost 15% and now it is under 10%. Really this is a bet on whether management will successfully penetrate overseas markets as they are planning to do and maintain their dominance in the US. Wall street seems to think they won't succeed in their goals.
Kiko81780
Kiko81780 - 5 years ago
The trouble is that everything is looking cheap... what a mess.
ltlmac55
Ltlmac55 - 5 years ago
TKTM is growing at a rapid clip overseas, the expansion is more than likely eating into margins and ROIC. I think the smartest industry play is for Live Nation to scrap their own ticketing plans and to find a way to merge with TKTM.

Own TKTM
Kiko81780
Kiko81780 - 5 years ago
TKTM in the news today:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aWCHPZvPqXV0&refer=home.

They are teaming up with Front Line Management and the Front Line CEO, Azoff, will be taking the helm.
kuuks
Kuuks - 5 years ago
Kiko have you looked at the VIC writeup on TKTM? It's very good and it was done when TKTM was trading at double it's current price. However, it's still so far out of my circle of competence. Other spinoffs you should keep an eye on are HI, JBT and the soon to be spun off BHS (the ticker will be CFL). Hillenbrand (HI) is in the awesome industry of deathcare where it has a fantastic moat in premium caskets. There is a great VIC writeup on it and why it's competitive position is so attractive. JBT is another industry leader in food processing in air transport. Of course it will be hurt by airline failures of the next few years. BHS is the high return segment of brinks security so it will be interesting too.
Kiko81780
Kiko81780 - 5 years ago
I've been looking into the Brink's deal and it looks interesting. CFL appears to be getting sold off and may offer a decent value in near future. Thanks for the heads up.
lucdan
Lucdan - 5 years ago
Any recent thoughts?

TKTM looks to me incredibly undervalued at 1.34*FCF.
Kiko81780
Kiko81780 - 5 years ago
I ventured in and have been burned so far, but I haven't sold yet...

They are trying to merge with LiveNation and need regulatory approval. The SEC sobpoenas likely won't help anything: http://finance.yahoo.com/news/Ticketmaster-notifies-brokers-apf-14849720.html

The VIC posting for TKTM looks to have been quiet since late November and a lot has happened with the company since then.

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