Conventum - Alluvium Global Fund on Liberty Broadband Corporation
Thesis
Liberty Broadband is held as a tracking exposure to Charter Communications and therefore shares the same underlying cable investment case. Alluvium believes the market is pricing permanent deterioration into businesses whose physical networks remain structurally superior to competing alternatives. The combined Charter and Liberty Broadband exposure trades at a deep discount to the fund's assessment of value. The fund has been buying into the weakness, although it acknowledges that operating news has not yet improved.
“their physical networks remain structurally superior to alternatives”
Key risks
- Continued deterioration in Charter's internet subscriber base
- Competitive pressure from fixed wireless and satellite broadband
- The valuation discount may persist if operating trends fail to improve