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Liberty Media Corporation recently announced that its board of directors has authorized the repurchase of up to $300 million of Liberty Capital common stock. This authorization is an increase to the $300 million share repurchase authorization of Liberty Capital common stock that was announced in March 2008. The existing Liberty Interactive and Liberty Entertainment repurchase authorizations remain in effect and were not affected by this action.

The stock has a trailing PE of 5.

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Morgan Stanley said it is downgrading Liberty Capital Group (LCAPA) to Equal-weight from Overweight following the carve out of 85% of its former asset value into new tracker LMDIA. See LCAPA trading at a discount to NAV due to potential liabilities in the case that Liberty liquidates its holdings. Do not see catalysts that would narrow this gap. Target at $17.

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Contraction of NAV discount post DTV stake transfer

John Malone

Liberty Media Corporation announced last week that its board of directors has authorized the repurchase of up to an additional $1 billion of Liberty Interactive common stock. This authorization increases to $3 billion the total amount authorized to be repurchased since the Liberty Interactive shares began trading in May 2006

The stock has a PE ratio of 15.

Last we take a look at Liberty Capital Media. We were attracted to this stock because the CEO, Gregory B.Maffei, recently purchased 15,000 shares or $1,764,000 worth of stock for his own accounts. Maffei is confident that he will drive shareholder value and return profits for his investors, and for himself.

Maffei is exploring a few options to raise the stock price. Currently Liberty Media owns a minority stake in DirecTV, but recent reports say Maffei is considering buying all of DirecTV. Spinning off DirecTV into a tracking stock for Liberty would benefit investors seeking to invest more directly into DTV-the top U.S. satellite operator.

DirecTV "is a good business and having access to those cash flows, being able to have it operate synergistically with our content businesses can be attractive under the right conditions," Maffei told Reuters at 25th annual Media and Tech Moguls Conference in Sun Valley, Idaho.

"It makes sense to give investors a way to invest in those assets directly rather than the pile of companies," Maffei said about the possible spinoff of DirecTV as a tracking stock.

All this action is right on the heels of a $500 million dollar buyback the Englewood, CO-based company authorized 2 months ago. The shares, priced between $23.75 and $25.75, were sold in a Dutch auction class self-tender offer.

Deutsche Bank considers the company a wise investment and gave the stock a Buy rating and raised its price target $4 bucks to $148. They foresee the company becoming the largest shareholder in DTV by acquiring News Corp’s 38.4% stake in the company, along with its 4 DirecTV board seats.

The benefits from a DirecTV transaction would be substantial. Liberty would receive $5 billion reduction in tax basis, a 14% discount to DTV’s closing price on the eve of the transaction, a cash component of $1.15 billion in value, and most importantly financial flexibility through controlling this underleveraged asset.

Given DTV’s low leverage, and substantial equity cushion, the opportunities for Liberty Media to push DTV to lever up are enormous. Deutsche bank concludes, "LCAPA remains one of our top picks and we reaffirm our Buy."

The CEO recently purchased 15,000 shares or $1,764,000 worth of stock.