Liberty Tripadvisor Stub-stock: Catalyst arrived on a dormant special sit


TL;DR: Liberty Tripadvisor (LTRPA) is a holdco stub-stock owning Tripadvisor (TRIP) shares (21% of Tripadvisor, spun out of Liberty-complex). Think of LTRPA like leveraged version of TRIP. Pull up today or Friday's pricing on LTRPA vs. TRIP to get a sense. Multi-bagger potential on straight equity; no theta/etc.

If TRIP's technical-breakout sticks LTRPA is going to be a fun-time. Hypothetically at this discount it should move 2-1 vs. TRIP. Ex: TRIP rallies 10% = LTRPA rallies 20%.

Here is a Barron's writeup from last summer on the situation: https://www.barrons.com/articles/liberty-tripadvisor-is-a-leveraged-way-to-play-tripadvisor-at-a-discount-51627293616

LTRPA notes:

  • Steep holdco discount. LTRPA simply owns roughly $600mil of Liberty's stake in Tripadvisor but it trades at a $250m market cap. The holdco gap narrowing to normal holdco-margins should provide a decent return in-and-of itself. You're buying $1 for $0.50.
  • It's Liberty Media. Greg Maffei & John Malone love making money. (We're just gonna forget the QRTEA part of Liberty mythology lmao). LTRPA is undoubtedly a stain of Maffei's reputation and he would love to change that. He plays to win.
  • TRIP may be finally breaking its brutal downtrend. A lot of special-sits folks have sidelined LTRPA for this very reason; just letting the pain settle first and letting the market say when to go.
    • Why did the downtrend break? Tripadvisor is turning around slowly. The new Liberty-appointed CEO is finally taking the reins and the quarter was solid. There's enough bad-news baked into price that it's fairly asymmetric now.
  • Travel recovery looking good. TRIP & LTRPA were murdered by COVID.
  • Tripadvisor is a good asset historically run by underwhelming management.
  • Nice market backdrop with the bear-market providing a natural tailwind. Tons of shops are trapped short/underweight-equity during a very oversold environment. Recession will be a shallow-one or non-existant after Q2 GDP revisions until late-2023.

Price Example

The last time TRIP traded $30/share, LTRPA traded $2.50/share. It's a little more complicated than that but you can get the idea.

Risks to consider:

  • LTRPA is very small and illiquid. Do not use market orders. Anything this small & illiquid can whipsaw you fast. Please be diligent on risk-controls and size it accordingly. For myself personally I'd size it like you'd size a call-option: 1-3% of portfolio.
  • Historically Tripadvisor has been a place money goes to die. This is a very contrarian play.
  • LTRPA had a fairly big fuckup in March 2020 with a margin call that was ultimately bailed out by Certares.

Enjoy & have fun on Greg Maffei's money-train. I mostly lurk so don't expect much chatter from me; just thought this was a fairly juicy sit to share.

Disclosure: Long LTRPA. Small option-sized position in my PA & client accounts

Edit: My thesis has nothing to do with LTRPB's weird trading over the past week or so. Liberty B-shares are Malone's way of keeping control interest over Liberty (supervoting shares) and are thus very illiquid.

Edit 2: Here is a VIC-writeup from 2018 outlining how to spread the old LTRPB/LTRPA holdco discount. It gives a pretty good overview of the weird A/B mechanics of Liberty but keep in mind this is pre-2020's margin-call fiasco.


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