Liberty Media to acquire Provide Commerce for $477 million
http://www.indiantelevision.com/headlines/y2k5/dec/dec61.htm
.
http://www.indiantelevision.com/headlines/y2k5/dec/dec61.htm
.
Proflowers SOLD
- Thread starter mlou
- Start date
- Status
:wide: Wow! John Malone must see the PF model as having a very bright future in the marketing world. Think of what cable advertising did for 1800Flowers and imagine that on steroids.
*Kicks self for not buying loads of PRVD when it was trading below $17.*
**Kicks self even harder for not shorting FLWS and FTD**
*Kicks self for not buying loads of PRVD when it was trading below $17.*
**Kicks self even harder for not shorting FLWS and FTD**
12BucksFor2Dozon
New Member
Here is the latest Morningstar report on Liberty, for those who would like to know more about our new competitor...
Thesis 11-30-2005
Buying shares of Liberty Media is like investing in a mutual fund focused on the media sector: Liberty shareholders are making a big bet on management's ability to realize value from minority stakes in multiple media companies.
We like most of Liberty's assets. We believe that its minority stakes in News Corporation NWS, IAC/InterActiveCorp IACI, Sprint Nextel S, Time Warner TWX, and Viacom VIA.B, which constitute 85% of Liberty's investment holdings (as of September 2005), and QVC, which represented 74% of 2004 sales (before its Discovery Holding Company DISCA spin-off in July), merit a narrow economic moat. Only Liberty's position in Motorola MOT and some budding technology assets have no moats, in our opinion.
We believe this complex portfolio structure often hinders Liberty's performance because it makes it difficult to realize the value of the company. Management is simplifying its portfolio structure, which we believe could unlock the value. The company is consolidating positions in core holdings to increase its influence on operations. In September 2003, it raised its stake in QVC to 98% from 42%. In addition, it is selling noncore assets where it did not have meaningful operational control. For example, it sold its positions in E! Entertainment Television and the International Channel Networks. It spun off its international holdings, Liberty Global LBTYA, and positions in Discovery Communications and Ascent Media (via Discovery Holding Company). It is also creating a tracking stock for its interactive holdings: Expedia EXPE, IAC, and QVC.
Given our positive view of management's plans and the relatively high quality of its assets, we think Liberty enjoys some advantages. Still, because the company retains a number of minority stakes and its investing record hasn't been perfect, there remains ample room for mistakes, in our view. For example, a number of technology and Internet-related holdings hurt Liberty's stock in 2001 and 2002. Therefore, depending on the market's view of management, this stock could trade at times well below the market value of its assets.
We would seek a moderate discount to our fair value estimate before buying the shares.
Valuation
We are increasing our fair value estimate for Liberty Media to $9 per share from $8. The increase is due to changes in our fair value estimates for a number of Liberty's investment portfolio holdings (almost all of our valuation is based on the firm's investment holdings). The fair value estimates increased for Motorola ($22 from $18), News Corporation ($20 from $16), and Sprint Nextel ($30 from $21). Our $8 valuation also reflects our new estimate for IAC ($42). The fair value estimates for the two other holdings, Time Warner ($18) and Viacom ($36), did not change. Our fair value estimate also reflects a $1 per share reduction for stock-option-related expenses. For Liberty's operating arm, we forecast 10% average annual revenue growth between 2005 and 2009. We forecast operating margins to expand from 11.6% in 2005 to 12.4% in 2009.
Risk
Because Liberty is close to being an investment holding company, its stock price won't necessarily track the market value of its holdings.
Thesis 11-30-2005
Buying shares of Liberty Media is like investing in a mutual fund focused on the media sector: Liberty shareholders are making a big bet on management's ability to realize value from minority stakes in multiple media companies.
We like most of Liberty's assets. We believe that its minority stakes in News Corporation NWS, IAC/InterActiveCorp IACI, Sprint Nextel S, Time Warner TWX, and Viacom VIA.B, which constitute 85% of Liberty's investment holdings (as of September 2005), and QVC, which represented 74% of 2004 sales (before its Discovery Holding Company DISCA spin-off in July), merit a narrow economic moat. Only Liberty's position in Motorola MOT and some budding technology assets have no moats, in our opinion.
We believe this complex portfolio structure often hinders Liberty's performance because it makes it difficult to realize the value of the company. Management is simplifying its portfolio structure, which we believe could unlock the value. The company is consolidating positions in core holdings to increase its influence on operations. In September 2003, it raised its stake in QVC to 98% from 42%. In addition, it is selling noncore assets where it did not have meaningful operational control. For example, it sold its positions in E! Entertainment Television and the International Channel Networks. It spun off its international holdings, Liberty Global LBTYA, and positions in Discovery Communications and Ascent Media (via Discovery Holding Company). It is also creating a tracking stock for its interactive holdings: Expedia EXPE, IAC, and QVC.
Given our positive view of management's plans and the relatively high quality of its assets, we think Liberty enjoys some advantages. Still, because the company retains a number of minority stakes and its investing record hasn't been perfect, there remains ample room for mistakes, in our view. For example, a number of technology and Internet-related holdings hurt Liberty's stock in 2001 and 2002. Therefore, depending on the market's view of management, this stock could trade at times well below the market value of its assets.
We would seek a moderate discount to our fair value estimate before buying the shares.
Valuation
We are increasing our fair value estimate for Liberty Media to $9 per share from $8. The increase is due to changes in our fair value estimates for a number of Liberty's investment portfolio holdings (almost all of our valuation is based on the firm's investment holdings). The fair value estimates increased for Motorola ($22 from $18), News Corporation ($20 from $16), and Sprint Nextel ($30 from $21). Our $8 valuation also reflects our new estimate for IAC ($42). The fair value estimates for the two other holdings, Time Warner ($18) and Viacom ($36), did not change. Our fair value estimate also reflects a $1 per share reduction for stock-option-related expenses. For Liberty's operating arm, we forecast 10% average annual revenue growth between 2005 and 2009. We forecast operating margins to expand from 11.6% in 2005 to 12.4% in 2009.
Risk
Because Liberty is close to being an investment holding company, its stock price won't necessarily track the market value of its holdings.
BOSS
FlowerChat Administrator
Let the games begin...
This should prove VERY interesting...should be evident by Valentines I would guess...
This should prove VERY interesting...should be evident by Valentines I would guess...
Interesting article but it's from 2001. I understand Liberty is pretty much out of European media these days. Their stock is indeed down 17% this year.
I'm surprised there hasn't been more comments about this sale...
Do you realize this is the company that owns QVC home shopping network?
.
Do you realize this is the company that owns QVC home shopping network?
.
Sher
New Member
I wonder if this is where Dan Smith is headed...I can picture MS stomping his feet over this one...wonder what he will expect us to compete with now....
Lower prices...or 'featured" designers on QVC strutting their wares....
My money says that either 800 flowers and FTD will merge or the whole stategy as we know it of one of them will change dramatically ...I think we will see some very familiar faces popping up in different companies over the next few weeks!
Veddy interesting.....I wonder how the Indian workers will be involved in this acquisition...telemarketing etc.....
Lower prices...or 'featured" designers on QVC strutting their wares....
My money says that either 800 flowers and FTD will merge or the whole stategy as we know it of one of them will change dramatically ...I think we will see some very familiar faces popping up in different companies over the next few weeks!
Veddy interesting.....I wonder how the Indian workers will be involved in this acquisition...telemarketing etc.....
BOSS
FlowerChat Administrator
mlou said:
I'm not... I do not think too many realize the ramifications of such a sale. Even myself, my minds gone in several possible directions over this one.
Maybe they will put stuff on live, on QVC, with their own *branded* containers, maybe they will work to build a local distribution network (we know florists want orders), maybe they will....
Maybe they will cover the FTD/TF court case...they do own Court TV too...
Well....I see the QVC site already has proflowers bouquets - under Home Decor - Fresh Flowers and Greens
I'm not suggesting that this sale doesn't concern me, but just my surprise that QVC is already selling arrangements from both proflowers and 800flowers. I just never thought to look here before.
I wonder if the sale will ultimately mean that 800flowers won't be able to have designs on the qvc site.
I wonder if the sale will ultimately mean that 800flowers won't be able to have designs on the qvc site.
12BucksFor2Dozon
New Member
To me it's pretty obvious what's happened here. Liberty is a media company, and they think/are betting that selling flowers today is all about marketing and price, so they feel their media leverage will allow them to relatively cheaply market direct ship/Proflowers to their semi-brainwashed QVC customer base.
I'm sure they have had plenty of corporate strategy meetings with words like "synergy" and "co-branding" strewn about, and spreadsheets full of margins and profit potential. Its a very clean model...centralized ordering, cheap foreign labor, mass buying and shipping leverage, all the things corporations like.
What they will have to do now is "grow the base", so to speak, to convince non-flower people to consider flowers as a purchase, something in general our industry has done a TERRIBLE job of. Maybe we will be able to use this coming effort against them by being fleet and quicker to respond, the classic weapons of the Davids against the Goliaths...
I'm sure they have had plenty of corporate strategy meetings with words like "synergy" and "co-branding" strewn about, and spreadsheets full of margins and profit potential. Its a very clean model...centralized ordering, cheap foreign labor, mass buying and shipping leverage, all the things corporations like.
What they will have to do now is "grow the base", so to speak, to convince non-flower people to consider flowers as a purchase, something in general our industry has done a TERRIBLE job of. Maybe we will be able to use this coming effort against them by being fleet and quicker to respond, the classic weapons of the Davids against the Goliaths...
One of the trends to watch is how ProFlowers handles increased volume and how consumers that actually see their flower purchases respond.
Based on Bizrate's recent ratings trends, the last month has been less than stellar.
Here are remarks from a few dissatisfied consumers:
Based on Bizrate's recent ratings trends, the last month has been less than stellar.
Here are remarks from a few dissatisfied consumers:
ProFlowers solicits comments from each purchaser via Bizrate feedback. FTD did too, but with numbers like that, why pay to tell the world how unhappy your customers are.
David
Well-Known Member
What they do well
Cathy,
I also see plenty of god comments about them.
Here are a couple of them.
“Your flowers were outstanding - My friend enjoyed them very much and they were delivered in time for her birthday. Thank you again.”
“Very consistent service with a high quality product. A+++ “
As I read your post about unhappy customers from pro flowers. I am more concerned with the staggering amount of new customers they seem to be getting every quarter. I am also concerned that pro flowers has almost a 90% good rating in the last three months. I would think people that have had a bad experience would be more inclined to fill out the survey. Do you see they rate order tracking? Florists have been slow to grasp the need to do this. I think florist need to see what they do well and why and respond.
Cathy,
I also see plenty of god comments about them.
Here are a couple of them.
“Your flowers were outstanding - My friend enjoyed them very much and they were delivered in time for her birthday. Thank you again.”
“Very consistent service with a high quality product. A+++ “
As I read your post about unhappy customers from pro flowers. I am more concerned with the staggering amount of new customers they seem to be getting every quarter. I am also concerned that pro flowers has almost a 90% good rating in the last three months. I would think people that have had a bad experience would be more inclined to fill out the survey. Do you see they rate order tracking? Florists have been slow to grasp the need to do this. I think florist need to see what they do well and why and respond.
David said:
David,
Have you thought about how many posts are from their "PR" or marketing department. Think they are using a 9 to 1 ratio? I know of other rates that are spam...
.
12BucksFor2Dozon
New Member
Mary,mlou said:
I am not sure if you have enough data to assume that the positive comments are part of a PR campaign...in fact you have none at all. Proflowers could not be growing as fast as they are and, indeed, been sold at such nice premium if not for the fact that A LOT of very smart accountant types haven't poured over their books/model with a very fine-toothed comb and have LIKED what they have seen. A LOT of careers will be made or destroyed at Liberty depending upon the outcome of this purchase, so I don't think the primary focus of its' Marketing/PR department is to load up survey results.
Proflowers has executed a vision and is making it work. Too many florist for too long took advantage of their relationships with their customers, and Proflowers used that laxness to create a thriving corporate business model...
And perhaps that is a good point...Corporate America likes to do business with itself, ie they don't necessarily trust the "Mom n Pops" to deliver the consistency and quality that they require. IBM, say, can "trust" Proflower/Liberty Media, because they understand the corporate culture and do the things required to satisfy each other.
Great point Kathy... Quantity vs Quality Control. PF worse enemy is themselves.
I agree with David, most people who order from PF are happy. Mlou, look at the net profit over the last few years; that line almost goes straight up.
--------------------------
Here's a marketing theory I came up with when it comes to Biz rate companies like PF. PF sends out an email to it's customer asking them what they thought. If the email comes back A++++, they get an email thanking them for the input and a link to Bzirate and if filled out, they get a 10% discount on their next order. If the email comes back bad, they send an email apologizes, promising to fix the problem and gives them a 20% and a free vase coupon.
Or if that is illegal, the good emails get a TY and a 10% coupon with a BIZRATE icon at the bottom. (and that is it - it doesn’t tell them, ask them to click the BIZrate icon) And the bad emails get the promise to make things better and the discounts.
I agree with David, most people who order from PF are happy. Mlou, look at the net profit over the last few years; that line almost goes straight up.
--------------------------
Here's a marketing theory I came up with when it comes to Biz rate companies like PF. PF sends out an email to it's customer asking them what they thought. If the email comes back A++++, they get an email thanking them for the input and a link to Bzirate and if filled out, they get a 10% discount on their next order. If the email comes back bad, they send an email apologizes, promising to fix the problem and gives them a 20% and a free vase coupon.
Or if that is illegal, the good emails get a TY and a 10% coupon with a BIZRATE icon at the bottom. (and that is it - it doesn’t tell them, ask them to click the BIZrate icon) And the bad emails get the promise to make things better and the discounts.
Also... I am not afraid and am not surpirsed. You people think this is bad? It's going to get a lot worse. Choose your target market wisely.
Be sure and set your florist up for the markets of tomorrow, because if you aren't you are slowly dieing.
Be sure and set your florist up for the markets of tomorrow, because if you aren't you are slowly dieing.
BOSS
FlowerChat Administrator
BOSS's Quote of the day!!
There ya have it!
Dazeal said:Choose your target market wisely.
Be sure and set your florist up for the markets of tomorrow, because if you aren't you are slowly dieing.
There ya have it!
- Status
