SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Microcap & Penny Stocks : Qurate Retail
QVCGA 11.84+5.4%Oct 30 3:59 PM EDT
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: sixty2nds who wrote (28)7/28/2025 7:24:31 PM
From: Sean Collett1 Recommendation

Recommended By
sixty2nds

   of 83
 
Well once they halted the dividend that was kind of all she wrote for the preferred. I've read things about them canceling the preferred altogether via a board vote on sites like Seeking Alpha or Substack, but the fact they didn't is telling.

As it stands the preferred now sit collecting as a cash liability with interest penalty on the balance sheet. The fact they still exist at all means IF they file they sit above common equity, QVCGA & QVCGB, so they do indeed still matter in a priority view.

Using a 6x EV/EBITDA multiple I get a negative equity value of ($1.90)-($2.24). Their actual EV/EBITDA is somewhere around a 5.6 but if you use the FMV of their debt then the EV/EBITDA is 4.5x and basically this thing is close to negative ($5.50)-($6.00) of equity value. In a distressed debt situation one would be looking at a multiple of 4-8x and FMV is really sitting close to bottom here....

I cannot back into where there is enough to cover preferred shares let alone anything left for QVCGA holders. What I could see happening is a bargain throw to LITNA holders exchange for new equity in the reorganized QVC, Inc. Still not sure how any equity value kicks it up another layer to QVC Group though.

On FCF - it's only free if it can be used freely. If you look at their FCF since 2022 it has been negative each year once you account for debt borrowing and repayments. So IMO too many looking at the wrong layer of FCF and not the full picture. The debt management has been eating anything leftover so it was never really free.

And cable in secular decline changes how they use to do things. This of course was my biggest miss in the whole saga.

When I saw the news about the bond holders hiring legal advisors (2 firms) + QVC Group hiring (2 firms) that was a sign this was heating. Then the LITNA holders hired advisors (2 firms).....keep in mind QVC Group is likely reimbursing for all this so they're paying for what six legal teams? Then QVC Group is paying $100K a month on two board members. Not the signs of a quiet fight in my view.

I am curious how they naviagte earnings. Last call they were already getting pressure on facility refinance and the tone around it was different comparing Q4 to Q1. Now you have all the legal firms and board seats....I would think we see some move soon. I think historically in a prepack those usually take 45-60 days to get into place so we're still in that window, but I think something comes soon. Creditors and the company don't want to drag this out because if EBITDA does keep dropping then so do potential recoveries.

I too stick around. I own their bonds now instead of any equity so will keep watch. There is also non-monetary value to be gained in watching this complex structure unfold.

Thanks for the discussion, 60!

-Sean
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News