The opinion of former NY Times reporter, current PE kingpin Steve Rattner carries a lot of weight with media moguls. And we’d expect that Barry Diller would particularly attentive to Steve, since he’s a board member at Barry’s IAC. So we’re surprised to read Steve’s acrid assesment of Barry’s cobble-it-together, spin-it-apart strategy at IAC, delivered at a Portfolio-sponsored breakfast today:
Rattner said that, as a member of IAC’s board, he couldn’t comment, but then proceeded to offer what sounded like a sharp critique of Diller’s actions:
I will say financial engineering is really not a way to create value for your shareholders or yourself or whoever your owners happen to be. Companies that buy or sell or spin off because they think the market doesn’t understand their multiple and so forth I think are really missing the point. I think at the end of the day, what really matters is running your company, building revenue, building cash flow, and ultimately that will create value and that value will be recognised. And spending your time getting lost off in financial engineering is a real mistake.
We weren’t there, so it’s possible that we’re missing something in translation — perhaps Steve was really talking about Diller nemesis John Malone, who’s the archetype financial engineer. But somehow we don’t think so. And we think the next IAC board meeting should be interesting.
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