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Liberty Interactive Corporation Message Board

  • tmcg1367 tmcg1367 Jul 22, 2006 11:17 AM Flag

    Annual Report quote

    This is a quote from the annual report:

    "Conventional wisdom is that the current Liberty discount will be largely transferred to
    Liberty Capital due to its complexity, passive equity positions, lack of tax basis and
    holding company discount. If this proves true, we may shrink the equity of Liberty
    Capital. Nonetheless, Liberty Capital will need to trade out of many of its passive equity
    positions and acquire new businesses or expand its existing businesses. The
    redeployment of this large equity base represents the greatest opportunity to re-direct
    the Liberty Capital Group.
    Page 6
    We believe this strategy gives us significant flexibility in capital structure and
    investment opportunities. We believe that it puts us in a good position to simplify
    Liberty Capital and create new avenues for growth, while expanding Liberty Interactive
    through organic growth, strategic acquisitions and business development. While we
    are focusing on this growth, we believe we will be in a much stronger position to
    actively manage the balance sheets of both groups. This should enable us to fund their
    growth initiatives while repurchasing equity at prices and under circumstances we
    deem appropriate."

    Conventional wisdom was wrong and the discount was transferred to the LINTA stub. I wonder if the prices and circumstances are "appropriate" to start repurchasing shares or if he is saving capital for another use.