Member Info for alex1621

Virgin Media have 10% farmed out to Goldman Sachs, who also control 10% ... the deal puzzles me and whilst I don’t understand it my guess is that it is not there to benefit shareholders ... my observation is that since this deal was done the share price graph looks like a rollercoaster ... you could make money shorting down and buying up ... keeping the SP in a range?

I’d be interested in understanding the purpose of this arrangement?

Reported EBITA was £375m, ahead of analyst forecast of £361m.

Has someone called time on Netflix's insane valuation?

If you thought that ITV was good value at 180, why would you bail out if it gets there?

Yes, and I think that has been happening for a couple of years. But to be frank brokers/analysts don't have a great track record ... I owned 888 a few years back and it had fallen around 30% below my purchase price, and an analyst suggested that the share was worth 18p ... it's now around £3, I think it fell as far as 36p.

World events are one factor, especially the trade issue with the US, not to ,mention Brexit issues and problems with Italy. More specifically we've seen some lacklustre updates from a variety of retailers ... so I'm not that surprised by the pull back in NXT SP. I think the next update is around early August, expect a further dip early July when the share goes ex dividend. I was surprised by how strong the last update was and I suspect that Next are emerging as one of the high street winners ... I look forward to the next update.

The point seemed to go over your head? Both shares are good examples of when markets get gripped by positive or negative sentiment on an individual share. At the moment sentiment says that Netflix will continue to grow to the Moon and ITV will plough the depths ... and when sentiment changes everyone will be asking why someone would be crazy enough to buy a stock with a P/E over 300? Any forecast miss and that share will crater. For some people intrinsic value is whatever the share price says it is, for others it reflects the fundamentals.

Netflix breaks $400 ... go back to Holland in 1636 and we could say much the same about rare tulip bulbs. The danger of Netflix for investors is that any performance stumble will collapse the SP to a level consistent with the profitability, i.e. well below $400. Just like tulip bulbs did in 1637.

You got it right the first time. Giving advice. As advised.

I can�t recall many times when a takeover took place when the SP was rock bottom. The academic research suggests that companies tend to pay too much of a premium, not too little. Subsequently, more often than not, the main beneficieries of a takeover is the shareholders of the company taken over. I�ve already stated that Im suspicious of the motives of Liberty with regard to its arrangement with Goldman Sachs. I suspect a takeover is likely at the early signs of a turnaround in the business. The comments made by Malone about the valuation are self-serving; they could easily have sold down their stake above 250 if the felt the company was vastly overvalued. I don�t care if they bid but i suspect that they will ... and if they do i hope the company put up a fight and a competitor joins in the bid. Time will tell.

I think you may be right about that. I recall it being publicised last year and the initial thought from the media was that a bid was imminent. I'm intrigued as to what they are actually doing with the holding?

I believe the tie-up between the two was around February 2017, so some time after Liberty Global took a stake in ITV. I also believe Goldman have the shares on loan, whilst LG retain legal ownership. I�ve no idea what the nature of the hedge involves, but if GS have 20% of shares to play with I doubt other shareholders are beneficiaries.

You are welcome trend364. I don�t know if I am right but I can think of no other reason why Liberty Global and the Vampire Squid would engage with each other ... it is certainly not for the benefit of the remaining 80% holders, so we might well see a drift downwards again unless we see some some institutional buying ... perhaps triggered by McCall outlining her strategy accompanied by firmer results.

I seldom see a comment about the above subject. So why did Liberty farm out 10% holding to Goldman Sachs, and why did Goldman build a 10% stake? I dont claim to know the answer to that question (perhaps someone else does) but I suspect that its a tie-up designed to keep the SP within a lower range. Since ITV�s results have been mediocre in recent months the LG/GS team dont have much competition from institutions, the real movers of share prices. My observation is that any drift up in the ITV SP has been followed by a steady move downwards. Is this the LG/GS team at work? The only thing to spoil this party would be a reversal in fortunes, strong Studio growth accompanied by a turn in the advertising trend. A commentator below suggested that Liberty are no longer interested in outright ownership of ITV. Possible, but I doubt they would be entering such a deal as the one above if that were true. I suspect they are just not ready to act at the moment. Good results and changing trends will bring in institutions ... and the game that I suspect is being played will be up. Interesting times for ITV.

Tom E ... I suspect that Liberty Global would like to bid just before the tide turns, and the forthcoming cash from Vodafone gives them the opportunity. The last time takeover speculation hit fever pitch it went to 220, which implies another 15% on top if an actual bid materialises, so at least 250. Irrespective of that ITV looks cheap at this level.

Casino investing? Take a look at the share price graphs of any established company over the last ten years and you will see similar patterns ... swings of 50% plus as sentiment changes or results disappoint. In many cases the SP moves are more extreme than the underlying intrinsic value of the companies. Glencore is a good example, 85p at extreme sentiment now �3.80, in the space of a couple of years. ITV is not unusual.

I suspect that�s why Malone farmed out his 10% to Goldman Sachs, giving them 20% to play around with ... to keep the SP down. The problem is that any signs of recovery in advertising and acceleration of Studio growth will spoil that best laid plan. Malone will have to pay north of 200 if he wants ITV, and significantly more should any other media company show an interest. With the Vodafone deal coming to fruition we may see this play out in 2018. Personally I�d like to see what McColl and her team can do with the business.

The problem for the ManWhoCan is that Next customers failed to take his advice and review random comments on Trustpilot before buying ... like he would? Retail is a cyclical business and during a down-cycle the weaker retailers go to the wall. The stronger suffer also but during these periods tighten up their act. When the cycle inevitably turns they perform strongly because they are operating tightly against less competition. I wouldn't be surprised to see store like for likes go positive in 2019.

You might want to reflect on the cognitive bias argument, and perhaps apply it to yourself. My observation of share narratives is that if a company posts good results the assumption is that the trend goes on forever, whilst the opposite applies to poor results. The analyst community being the worst culprits. ITV's future is not set in stone, and neither is Facebook's. ITV in 5 years may be a completely different company. If sentiment changes, as it easily could should ad revenues increase and the studio business continues to grow, watch how the narrative changes ... the market wouldn't touch house builders in 2009, by 2014 you'd think they were going to grow to the Moon. That's sentiment at work.

You make my point for me. You assume that nothing changes. When Facebook tanked because investors thought they were behind in mobile the company made changes. When you look back now you do so with the benefit of hindsight, but you could have made a gloomy prediction at that time about it being all over for Facebook before they got their act together. In five years you might look back at ITV and come to the same conclusion. ITV studios could grow rapidly to the point where free to air is supplementary. For example.