Liberty Media Corp (LMCA), Sirius XM Radio Inc (SIRI): This Media Company has a Lot of Potential

In the first quarter 2013, Charter managed to narrow its loss from $94 million, or $0.95 per share last year to $42 million, or $0.42 per share. The loss has been narrowed due to the increasing revenue of the Internet and video segments, offsetting by the shrinking telephone business. After good earnings results and John Malone’s stake announcement, Charter’s share price shot up to $110.80 per share, which means that Charter is now worth more than $11.1 billion on the market. The market values Charter Communications, Inc. (NASDAQ:CHTR) at nearly 9 times EV/EBITDA. Liberty Media Corp (NASDAQ:LMCA) seems to be expensively valued as well–at $121 per share, Liberty Media is worth $14.7 billion on the market. The market values the company at more than 35 times EV/EBITDA.

My Foolish take

In order to value Liberty Media properly, investors should value its holdings and the potential of consolidation benefits. It seems that John Malone aims for the global consolidation of the cable businesses around the world. Many investors think that Charter could be used as “an industry consolidator” for the cable business in the U.S. This move could be quite beneficial for Liberty Media Corp (NASDAQ:LMCA) and its shareholders in the long run.

The article This Media Company has a Lot of Potential originally appeared on Fool.com and is written by Anh HOANG.

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