GCI Liberty: Thoughts!

I have been looking at various securities this weekend to work on what is finally turning out to be an idea-rich environment. GCI Liberty, the sole cable provider in Alaska, was an interesting company to look at given that it belongs to the Malone complex. Amongst the dozens of securities and tracking stocks that the Liberty empire has, GLIBP (GCI Liberty Preferred) and GLIBA (GCI Liberty Common A) are two such securities.

GCI Liberty has always traded at a discount to the underlying Liberty broadband and Charter shares. I wanted to do a quick back of the envelope NAV calculation to see the level of discount and whether it would interest me among all the other opportunities on hand. Unfortunately, the discount using a fairly conservative approach turned out to be close to 20% and not much higher that I was expecting. Please note that the below NAV calculation aims to capture only the key components and is a rough guesstimate of the NAV.

Screenshot 2020-03-23 at 5.12.43 PM

However, the cumulative, non-convertible preferred stock trading at $22.25 with a 7% coupon (payable in 4 quarterly payments) with a $25 liquidation value callable after 2021 with a yield of 8.71% is mildly more interesting play with the common equity providing the cushion required for the dividend payments.

Update: To reflect the cash on the balance sheet. Thanks to Rocco for pointing it out.

4 thoughts on “GCI Liberty: Thoughts!

  1. What about the discount of LBRDK on CHTR? If you take into account of this double discount, GLIBA becomes even more interesting

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  2. Agreed. The look through basis of $CHTR through $LBRDK/A will add another layer of margin of safety but needs another layer of catalyst as well. I was more looking from the perspective of whether in the volatility in the market, the discount to the NAV had widened like it had in several other securities. Thanks.

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  3. I just corrected it. The discount does get a lot higher to about 19%. It also gives a lot more comfort on the preferred as well. Thanks for pointing it out.

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