A reader from the securities industry tells us the reason Liberty Media- owner John Malone has been busy selling off nearly $18 million worth IAC (IACI) shares is that a Liberty Media (LINTA) company QVC is $5.2 billion in debt and “will come close to violating the 4.0 leverage covenant in 2009.” Explains our reader:
The IAC stock (and various spin-offs such as TKTM) are held at the LINTA tracking stock, which also holds the QVC business. He is selling the IAC stock to paydown the QVC debt which now stands at $5.2 billion, and they will come close to violating the 4.0 leverage covenant in 2009 because of downturn in QVC (like all retailers). The total IAC stocks are worth about $1.5 billion, so that is the preferred method for paying off the QVC debt until that business turns around in a better economy.
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- QVC Equals Debt Not Friendship.
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