Spinoff Odds & Ends: Graham, Noble Corp, Liberty Rights Offerings

It’s time for another edition of Odds & Ends where we share some random articles and pieces that we have been reading…

1. Barron’s is bullish on ‘small-scale conglomerate’ Graham Holdings (GHC) and thinks it’s sorely undervalued on a sum of the parts basis. Although the stock is up about 17% from the date of publishing to ~$423, it still remains far below the estimated $700-800 of asset value. Graham spun off its cable business Cable One (CABO) back in 2015 (remember the Summer of Spin?) and it’s done well for shareholders so far.

2. Noble Corp (NEBLQ) recently filed for Chapter 11, but the company is still hounded by legal woes stemming from its ill fated 2014 spinoff of Paragon Offshore. Like many others, Paragon was brought into this world saddled with debt and a weak asset base. It quickly ended up liquidating and its shareholders sued the parent for fraudulent transfer. The case is still ongoing. Maybe something for Occidental Petroleum (OXY) shareholders to think about with the recent filing at California Resources Corporation (CRCQQ).

3. Yet Another Value Blog takes a skeptical view of the recent rights offerings at John Malone properties Liberty LatAm (LILAK) and Liberty Sirius (LSXMK). John Malone is famous for his complex transactions and dizzying corporate structures and was even featured in the spinoff bible You Can Be A Stock Market Genius. Historically, he has often delivered for shareholders that followed along, but as the author points out, not everything in his empire has been gold. Is this a case where past performance is not indicative of future results?

Please feel free to share anything you have been reading below!

Disclosure: Author is long shares of LSXMK.


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