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Microcap & Penny Stocks : Qurate Retail
QVCGA 11.23+3.0%Oct 29 3:59 PM EDT
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To: sixty2nds who wrote (48)8/13/2025 9:06:28 AM
From: Sean Collett  Read Replies (1) of 83
 
Hello 60,

I too am a far of sooner rather than later. They run the risk of the business continuing to decline and value destruction the longer it drags.

I took 10-15 min yesterday to run through some modeling scenarios to see what the QVCGA equity would be worth if they succeeded with this LME as TJ proposes. If they took out all senior notes with the cash on hand I do believe they would need to get aggressive in offering to make sure there are no holdouts and it can happen out of court.

As I already shared, below is my model of where I think the offering would have to go to get full buy-in:


Now we can also try and assume TJ is correct and they will vote to cancel the preferred shares so no dollars actually have to be used to remove this. The preferred were really nothing more than a creative way for management to return cash to shareholders (i.e., themselves) while cash was restricted:


This puts the new enterprise value around $5,439.54M as I assume they keep LITNA untouched leaving the DTL (I'm using only half the reported DTL with $565M as I assume it's 50% offset with NOA upon retirement) in place and then they have the $2,900M revolver draw, $114.75M left in cash, and $92M in minority interest.

Now here's where the friendly LME starts to fall apart because it all goes back to secular decline. We would still expect a multiple of 6x to be used coming off these situations and FITCH has EBITDA trending towards $800-900M. At $900M this puts the QVCGA equity value at ($4.92) and at even $880M it's ($19.83). If EBITDA fell to $800M which is low end then we're at ($79.50).

We will see what the lawyers draw up. All I know is the math is not really supporting a friendly exchange and not supporting the common. I do think the preferred existing are a possible tool to be used for negotiations if chapter 11 begins (prepack or freefall) so who knows you may get something as QVCG still has $462M of cash at their level.

Cautious investing,

Sean
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