Qurate: Buy QVC Bonds, Ignore Preferred Or Common Stock

2025-01-10 18:07:05 ET

Summary

• Investing in Qurate securities at current distressed prices could yield large returns as the company has significant recovery potential despite financial challenges.
• Qurate's common stock, preferred stock, and QVC bonds are trading at distressed levels, reflecting market concerns about potential bankruptcy.
• Qurate faces significant debt maturities, with uncertainty about repayment plans, leading to speculation about possible reorganization or bankruptcy protection.
• Learnings from the Tripadvisor merger suggest a potential restructuring for Qurate, with bondholders prioritized, posing risks and opportunities for different securities.

Adding five cents to the Qurate debates

This article is to add my five cents to various debates about the Qurate Retail related securities that are available for trading, which are:

1. the Qurate preferred stock ( QRTEP ), which are worth ~$1.27B at par, but are currently trading at below 40% of that
2. the two classes of Qurate retail common stock ( QRTEA ) ( QRTEB ), that represent a very small market cap at the current trading prices of under $200M. QRTEA is the normally traded liquid common stock, while the QRTEB is a much less traded voting stock
3. the QVC bonds ( QVCC ) ( QVCD ), that have been issued by the subsidiary QVC. These secured unsubordinated bonds are trading around half of their $25 par value at the moment
4. And finally, the Liberty Interactive LLC bonds, although these can largely be considered as separate from the above three securities. We'll still touch on these for completeness sake. Note that Liberty Interactive LLC currently has no equity trading on the exchange, but the ticker of the company equity was "LINTA" in the past. The LINTA bonds are still trading, though, and currently at distressed levels with very high yields

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