Liberty Capital

"Buffett, after a long period of relative inactivity stretching back to the immediate aftermath of 9/11, has had one of the most active periods of his long career. Since the fourth quarter of 2008, he has deployed over $80 billion (over $15 billion of it in the first twenty-five days after the Lehman collapse) in a wide variety of investing activities: • Purchased $8 billion of convertible preferred stock from Goldman Sachs and General Electric • Made a number of common stock purchases (including Constellation Energy): $9 billion • Provided mezzanine financing to Mars/Wrigley ($6.5 billion) and Dow Chemical ($3 billion) • Bought various distressed debt securities in the open market: $8.9 billion • In Berkshire’s largest deal ever by dollar value, bought the 77.5 percent of Burlington Northern that he didn’t already own for $26.5 billion • Acquired Lubrizol, a leading, publicly traded lubricant company for $8.7 billion • Announced a sizable ($10.9 billion) new investment in IBM stock Over the same period, John Malone has been quietly conducting an extended experiment in aggressive capital allocation across the disparate entities that were spun out of TCI’s original programming arm, Liberty Media. In the depths of the financial crisis, Malone: • Implemented a “leveraged equity growth” strategy at satellite programming giant DIRECTV—increasing debt and aggressively repurchasing stock (over 40 percent of shares outstanding in the last twenty-four months). • Initiated a series of moves across the former Liberty entities, including the spin-off of cable programmer Starz/Encore and a debt-for-equity swap between Liberty Capital (owner of Malone’s polyglot collection of public and private assets) and Liberty Interactive (home of the QVC shopping network and other online entities)."

"Swept in and bought control of Sirius Broadcasting, the satellite radio service, through Liberty Capital, in a distressed (and extremely attractive) transaction at the nadir of the market in early 2009. He also bought back 11 percent of Liberty Capital’s shares in the second quarter of 2010. • Through his international cable arm, Liberty Global, announced the company’s largest acquisition ever, the purchase of German cable company Unitymedia for over €5 billion (less than seven times cash flow), as well as the sale of its sizable stake in Japan’s largest cable business for over nine times cash flow (with all proceeds sheltered from taxes by the company’s enormous pool of net operating losses). He also continued Liberty Global’s aggressive buyback program (the company has repurchased over half its shares in the last five years). Phew . . . so while corporate America generally stood frozen on the sidelines, these two wily CEOs engaged in an orgy of Keynesian “animal spirits.” They were, to qualify Buffett’s dictum, very greedy at a time when their peers trembled with unprecedented fear."