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What are all the gurus doing with LMDIA

November 26, 2009 | About:

Many Gurus own LMDIA, including Klarmin and Paulson who have very large holdings of it. Recently LMIDA merged with DTV and spun off LSTZA to its shareholders. For every 10 shares of LMDIA you get one share of LSTZA. Does anyone know what any of these gurus are doing now? Are they buying LSTZA the spinoff? Anyone care to speculate?

Rating: 2.3/5 (4 votes)

Comments

commodity
Commodity - 4 years ago
http://dealbook.blogs.nytimes.com/2009/05/04/directv-sets-merger-with-liberty-media-spinoff/

Liberty Entertainment had sold at a discount as a tracking stock.

Malone plays lots of games- read the Joel Greenblatt book - You can be a stock genius to.

He always comes out on top.
yswolinsky
Yswolinsky - 4 years ago
I read Greenblatt's book he said Malone made a very complicated spinoff with TCI to try to confuse potential investors. Is Malone doing the same thing now? Are the gurus buying LSTZA? did they buy LMDIA for the dtv merger or to get in on the lstza spinoff?
cm1750
Cm1750 premium member - 4 years ago


I bought LMDIA in late March for 2 arbitrage reasons.

1) Arb opportunity #1 - LMDIA was trading at a very large discount to its DTV, Starz etc. ownership stake, and thought it highly likely the DTV and LMDIA would effectively merge which just happened.

2) Arb opportunity #2 - thought AT&T would eventually acquire DTV to supplement their current offerings. See: http://dealbook.blogs.nytimes.com/2009/11/19/malone-wont-rule-out-phone-deal-for-directv/

I am assuming Paulson sees the same thing as he used to be in M&A at Bear Stearns and focused on M&A arb at his hedge fund before focusing on the housing collapse.
batbeer2
Batbeer2 premium member - 4 years ago
From the Longleaf report (mason Hawkins):

The relationship between the price of DTV and LMDIA over the last year provides insight into how variably “Mr. Market” priced virtually the same asset. Liberty Media

Entertainment owns just over half of DTV’s shares as well as several small assets, making

the value of the two companies very close on a price per share basis. In November of

2008 DTV traded around $22 while LMDIA fell to around $11. The underlying assets

did not change, and we exchanged half of our DTV position to overweight LMDIA. By

May the trade paid handsomely. LMDIA rose above $25 and DTV sold for below $24.

Because the stocks’ P/V ratios were similar, we equally weighted the positions. Since

then, LMDIA has appreciated to over $30. We have trimmed the position and added

some of the proceeds to DTV in the mid $20s. These portfolio changes reflect more

trading than usual for Southeastern — we are long-term business owners. “Mr. Market,”

however, has enabled us to own the same satellite television company through two

different stocks at vastly different prices. Not surprisingly, Liberty Media Entertainment

has been the top contributor to the Partners Fund’s performance this year, gaining

almost 80% in 2009.
yswolinsky
Yswolinsky - 4 years ago
so i guess none of the gurus bought lmdia for the stub

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