Via The Motley Fool
Liberty Media is a behemoth. It's gone through so many incarnations that Wall Street has had difficulty figuring out just what it's worth. Even average people have difficulty understanding the empire that John Malone has put together. In an attempt to make the world a brighter place, I decided to break this monster into pieces that we all can understand, because it's a great holding company with wonderful assets and gobs of free cash flow.
Liberty Media is one company that is traded in the form of three tracking stocks: Liberty Capital (NYSE: LCAPA), Liberty Starz (NYSE: LSTZA), and Liberty Interactive (NYSE: LINTA). None of these tracking stocks are legal entities in themselves. All the assets are owned by Liberty Media Inc. The tracking stocks offer investors different ways of investing in different Liberty assets.
...Liberty Interactive is dominated by QVC, responsible for $7.3 billion in revenue and $1 billion in operating income. Despite the bad economy and a year in which revenue was up only 1%, QVC provides $1.5 billion in cash flow annually, when you back out depreciation. The other interactive businesses generated $931 million in revenue and $49 million in net income. Although these businesses have hit the skids thanks to the recession, they were purchased because of their rapid revenue growth, and I expect them to pick up again.
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