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A Wall Street Nod for Liberty Entertainment
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Tom Eagan of Collins Stewart was busy again on the satellite TV front, initiating coverage of Liberty Entertainment shares with a buy rating and $33 price target, saying the next three to nine months will be "pivotal" for the company and its stake in DIRECTV.
The nod from the analyst last week came as Liberty Media continues to position Liberty Entertainment from a tracking stock to an asset-based stock.
In a note released Friday, Eagan said a narrowing of the discount on Liberty Entertainment would enable the entity to acquire remaining DIRECTV shares "without significantly diluting the existing Liberty Entertainment shareholders and without having to pay DIRECTV more cash than Liberty Entertainment currently has on hand." Thus, an ongoing series of moves could allow the company to combine with DIRECTTV tax free, he said.
Should the discount widen, however, Liberty Entertainment could sell its stake in DIRECTV to AT&T, or allow DIRECTV to acquire its stake.
That all may appear to be some complicated strategic moves for the involved companies. Nonetheless, Eagan said his "buy" rating on Liberty Entertainment is supported by "the strong DIRECTV fundamentals and the significant discount at which Liberty Entertainment trades versus its NAV."
Eagan added, "We expect the strong DIRECTV fundamentals will continue through 2009 aided by the February 2009 digital TV migration and the roll out of the AT&T triple play partnership."
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Tom Eagan of Collins Stewart was busy again on the satellite TV front, initiating coverage of Liberty Entertainment shares with a buy rating and $33 price target, saying the next three to nine months will be "pivotal" for the company and its stake in DIRECTV.
The nod from the analyst last week came as Liberty Media continues to position Liberty Entertainment from a tracking stock to an asset-based stock.
In a note released Friday, Eagan said a narrowing of the discount on Liberty Entertainment would enable the entity to acquire remaining DIRECTV shares "without significantly diluting the existing Liberty Entertainment shareholders and without having to pay DIRECTV more cash than Liberty Entertainment currently has on hand." Thus, an ongoing series of moves could allow the company to combine with DIRECTTV tax free, he said.
Should the discount widen, however, Liberty Entertainment could sell its stake in DIRECTV to AT&T, or allow DIRECTV to acquire its stake.
That all may appear to be some complicated strategic moves for the involved companies. Nonetheless, Eagan said his "buy" rating on Liberty Entertainment is supported by "the strong DIRECTV fundamentals and the significant discount at which Liberty Entertainment trades versus its NAV."
Eagan added, "We expect the strong DIRECTV fundamentals will continue through 2009 aided by the February 2009 digital TV migration and the roll out of the AT&T triple play partnership."
