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결론: 마이클 배리의 WBD(워너브라더스디스커버리) 투자는 AT&T 워너미디어 분사 후 매도 압력으로 주가가 급락한 상황을 노린 것이며, 발표자는 내재가치 대비 주가가 절반 수준이라 매력적이라고 봄. 배경: 배리는 2022년 1분기 기준 WBD를 약 1,900만 달러 규모로 보유한 세 번째 큰 포지션이며 평균 매수가는 약 25달러, 당시 주가는 약 15달러. 분사 구조: AT&T 주주가 신규 회사 지분 약 71%를 받았고, 배당 투자자 성향상 매도 압력이 클 것이라는 분석. 조엘 그린블랫의 책을 인용해 분사 주식이 원하지 않는 주주에게서 매도되며 저평가 기회가 생긴다고 설명. 주가 흐름: 분사 이후 약 3개월간 40% 이상 하락했고, 하락세가 진정되는 모습이라고 언급. 재무: 합병 후 프로폼 기준 자산 약 1,550억 달러, 부채 약 1,000억 달러, 순자산 약 550억 달러. 시가총액 약 350억 달러. 부채 약 570억 달러가 상환 부담. 현금흐름 전망: 2022년 무레버리지 FCF 약 61억 달러, 2023년 약 71억 달러로 경영진 전망 인용. 시총 대비 FCF 수익률 2022년 약 17%, 2023년 약 20%로 제시. 밸류에이션: 터미널 멀티플 10배, 할인율 11.5%, 경영진 전망의 50% 할인 가정 등 보수적 모델 적용. 주당 내재가치 약 47달러, 부채 차감 후 약 27.75달러. 현재가 14.65달러는 내재가치의 약 52% 수준. 전략: 2023년 1월 만기 12.5달러 현금담보 풋옵션으로 분할 매수 접근 제시(프리미엄 약 1.3달러, 실질 매수가 약 11.2달러). 발표자는 직접 포지션 진입을 고려 중이라고 언급. 리스크: 실적 하락 가능성, 경쟁 심화, 부채 상환 속도, 영업 전망 불확실성 등을 언급하며 투자 판단은 본인 몫이라는 입장. 영상 말미에는 유료 구독 홍보 포함.
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michael berry's third largest position is actually a very complicated spin-off in warner brothers discovery and that's an opportunity where i actually sifted through all of the documentation and provides you with a really clear view of the opportunity including a valuation model which is what i'm going to cover in this video so guys smash that like button subscribe if you're new you're watching more money let's get it what's up guys and welcome back to the channel where the goal here is to help at least a thousand people achieve financial independence much sooner and i love looking at michael berry's portfolio because sometimes he'll enter into some pretty obvious opportunities like alphabet or meta but other times he enters into pretty complicated opportunities which is a real challenge which is what i love because value investing is kind of like a puzzle and so sometimes these opportunities you kind of have to sift through a lot of information to really understand spin-offs are like that and so michael bury's third largest position is warner brothers discovery and this is actually one of those types of complicated opportunities and so in march 11th you can see that discovery shareholders actually approved the warner media acquisition and so technically it's an acquisition but really it's just att spinning off assets into warner media and then warner media being sort of like the accounting acquirer and i'm going to show you that in the next couple of slides and here i have highlighted michael bury's portfolio as of q1 of 2022 so this will get updated very soon but you can see that his third largest position is warner brothers discovery where there's around 19 million dollars invested in this opportunity now the one thing that i do want you guys to pay attention to is that reported price he paid approximately 25 dollars for this security now if you guys look at the share price right now the company's trading at around 15 so can we buy into this opportunity at a price lower than what michael bury paid for it and what percentage of the intrinsic value is that 25 or does that 25 dollars represent and what percentage of the intrinsic value does 15 represent so who's getting a better deal or does it even matter if the discount is large enough well we're going to dive into that and the answer i think in my opinion is going to surprise the heck out of you and just before we dive into that i just want to point out that one of the most well-known and successful media cable company investors led sort of this spin-off transaction and on seeking alpha this is what one of the writers wrote they said that malone is a brilliant financial engineer with a vision for future and a buffett-like ability to allocate capital i personally don't know if i'd go that far in describing john malone but the one thing that i would say is that he and i are one in the same because we're both psychotic about rvs and the only types of vacations i want to take are rv vacations and he does the same thing so that's my spirit animal right there but you can see here this is the large library that warner brothers owns you know you can see that they own the game of thrones franchise they own succession sex in the city matrix those are probably older brands but they have brands that are continuously generating ad spend some of those would be the us open the pga the nba mlb i guess it's all rights to broadcast these the food network home and garden television tlc tnt and maybe to a lesser extent cnn i don't know how much uh advertising revenue cnn has been generating lately but it's probably up there still but you can see that with their at least their tv portfolio it's a diversified media offering because you have access to tv but they also have access to streaming and uh selling out the rights to their content library so there's a lot there with this uh library now you are gonna see many terms being used when you sort of analyze this opportunity but as of february they're describing this transaction as a spin-off rather than an exchange offer and that's kind of how i've been looking at it from the beginning and so it's nice that they're using that term but i'm going to sort of dive into that a little bit more with this and you can see that high level at t is moving their warner media assets to the discovery company but the assets are so large relative to discovery's assets that they actually created a new company and so you can see that 71 of this new company is going to be owned by att shareholders and i actually think that this will cause huge selling pressure because att investors are likely to be dividend investors and not interested in the new company and so effectively you can see on the bottom left here that at t is essentially offloading warner media and it's related debt to discovery so that's essentially what's happening here and so note that it's the shareholders of att that are going to receive the common stock not att themselves and that's a important differentiator because what it allows att to do is offload these assets from their balance sheet as well as the debt and so that's the goal of this transaction att does not want to have this debt on their balance sheet which makes a lot of sense because it could help them command a higher valuation and remember what i said 71 of the shareholders of this new company will be 18t shareholders now not all shareholders are the same some people investor dividends other people invest for capital gains and so i would argue that a lot of att shareholders are sort of dividend focus and so they're not going to want to own this company they're going to want to sell it into the market as soon as they get access to the securities and that's really what we've been seeing you can see that there has been immense selling pressure from att shareholders who are offloading these shares and has brought down the share price down 40 or over 40 and what this is is a textbook and predictable sort of situation or occurrence that you could have sort of predicted and in fact it was actually written about in a very famous book so there's a book called you can be a stock market genius written by joel greenblatt and in the book he talks about different types of opportunities mind you this is not a paid advertising or anything but i'm just saying that there was a chapter in the book talking about spin-offs and what he says is if you give shares to people who don't necessarily want to own them it creates a really good opportunity for value investors because those people who don't want the shares they'll sell them off and it could create a very good buying opportunity for people that are looking to pick up a very valuable business on the cheap and so that's kind of what's happening here and so we could have predicted the share price to decline in fact that's what i did because michael bury didn't just buy into his discovery position recently he's had it for a couple of quarters now and so the one thing that i was waiting for is the share price two decline now it's been three months since those shares have sort of been released to the public and we're noticing that the share price has declined over 40 percent but you're noticing that it's leveling out a little bit now and so there could be an opportunity to purchase these securities on the cheap now point that i do want to note is that michael bury actually made his position at 25 a share and note that they're trading at 15 per share now he's a lot smarter than i am but i personally in this situation would have waited a little bit and i have been waiting but it's looking more like i'm going to initiate a position in this opportunity very soon and i'm going to show you how i'm going to invest in this opportunity closer to the end of this video so stay tuned now over here you can see that this sort of just explains a transaction a little bit more the two areas that i want you to focus on is the first one where i say warner media business was distributed to 18t shareholders via pro rata distribution and immediately thereafter they combined with disney so effectively i'm saying that dividend investors don't want this which could lead to selling pressure which leads to an opportunity and i just put a question mark there now the other thing that i want you to focus on is that last line accordingly the financial statements of wbd as of and for any periods prior to april 8 2022 do not include the financial results of warner media's business and future results will not be comparable to historical results why does this matter well it matters because right now the market cap of the company reflects the new company but the financial statements reflect the old company so there's a bit of a disconnect and this is why i always say you gotta follow the story not just following what sort of like the information gathering websites spit out to you your metrics will be all wrong and here's the note from the latest quarterly report due to the limited time between the transaction date and the company's filing its quarterly report and 10q for the quarter ended march 31 2022 the business combination is incomplete and the company is not yet able to disclose the provisional amounts to be recognized as of the acquisition date for assets acquired and liabilities assumed so we do not have a good picture of what the balance sheet looks like but i have something for you so i actually sifted through hundreds of pages of disclosure that was announced for this transaction that was listed with the sec and i have a pro forma balance sheet to show you guys so you can see here that the pro forma combined balance sheet is expecting to have or did have as of december 31st 10 billion dollars of cash and 155 billion dollars of total assets note that the combined company has a 155 billion dollars of assets and 100 billion dollars of liabilities so effectively net 55 billion dollars of assets but it's trading for 35.5 billion dollars now why is that well notice that some of their assets are sort of intangible in nature now the film and television library probably could sell for around 30 billion so it's probably accurately reported on the financial statements but it's hard to tell what those intangible assets would sell for you got to sort of dive into them and understand what they are and that goodwill that's just a balancing adjustment so really what goodwill is is when you pay money for a company and what they'll do is they'll fair value all the assets and any cash or price that you paid for the business that's left over after that calculation goes into goodwill so it's an accounting balancing equation and the way that accountants support that goodwill number is they do what's called a goodwill test at the end of every year effectively what they're saying is you value the company based on a certain cash flow profile for the business does the business still have that cash flow profile if it does then what you paid for the business still makes sense and so goodwill stays the same on the balance sheet it never goes up but it could go down which is referred to as an impairment to goodwill where effectively the future expected cash flows for the business are lower than what you sort of expected when you initially made the transaction so you might in this environment see quite a few goodwill impairments happen for companies that were buying other companies at elevated prices in 2021 so just keep on the lookout for that and so from here you can see that the current portion and the non-current portion of debt equals approximately 57 billion so there's a ton of debt with this company and they're gonna have to pay it down and here's their consolidated income statement so you can see that on the back of the envelope suggests that the combined entity generated around six billion dollars of free cash flow in 2021 and when you compare that to to the current market cap of approximately 35 billion dollars you have maybe what's considered a 17 free cash flow yield and of which a significant amount of that cash will be needed to pay down that 56 billion dollars of debt so they have a long way to go to pay down that debt so in the valuation for this company we do have to penalize them for that down now i penalize every company for the debt but this one we especially have to really consider doing and now i got my hands on something really cool they actually forecasted to 2023 what they expect the unlevered free cash flow for the business would be and you can see that right here where they're forecasting the discovery business and the warner media business and so when you combine those two notice first of all that i was wrong for their 2021.
i said that the free cash flow would be around five or sorry six billion they're saying that it's probably going to be around five that 2.6 plus a 2.4 but in 2022 notice that the combined entity is suspected to have 6.1 billion dollars in unlevered free cash flow and 7.1 billion dollars in unlevered free cash flow in 2023 so according to management it reflects a 20 22 free cash flow yield of 17.2 and a 2023 free cash flow yield of approximately 20 so that's huge based on the current valuation so it's very clear that this company is undervalued the only question is how much of the debt comes off from that valuation and does the net valuation still represent an opportunity relative to the current share price and i'm going to show you all of that and the way that i'm going to do that is i actually created a model for warner brothers discovery you can get access to this at the lower tier of the patreon but the one thing that i want to point out to you is that i'm a little bit suspect of management's numbers and here's why notice that their free cash flow as a percentage of revenue in 2022 was around 10 in 2023 they're forecasting it to be around 12 but in 2030 they're forecasting it to be around 15 so i understand that they're going to get some synergies here but are they going to really get 300 basis points of synergies to make the business 50 more profitable than what it was in 2022 that's a hard forecast to grasp and so i would be a little bit suspicious of that but like i always say i always like to value the companies out the way the managements are forecasting unless there's sort of like an obvious area where you can bring down the numbers but then i like to do a 50 haircut to my valuation and then i'll only buy at that 50 level and so you can see from here that using a 10 times terminal multiple because i don't think that the company is going to grow as fast as what management thinks is going to grow beyond 2030 so i'm just using a lower multiple i'm using a higher terminal discount rate of 11.5 percent in fact i use that terminal discount rate for most of the opportunities that i value i'm valuing the company at around 47 per share compare that to the 15 per share and you have a real value however notice how much debt they have their debt actually brings the valuation down by 19.50 and so the net valuation is 28 or 27.75 and now you subtract that from the current share price and so the share price as a percentage of its intrinsic value is around half so 52 no remember that i said that michael bury bought this for 25 dollars per share so i don't know how he was valuing the company but i can't see based on the information that has been provided that this company was worth significantly more than 25 dollars per share and the current share price of 14.65 reflects a free cash flow per share yield of 13.5 percent so that's pretty exceptional but note that the true annual free cash flow yield is probably higher than what i've calculated because management is not going to pay down 100 of the debt so that's probably what upside michael bury was valuing into his valuation but i personally penalize everyone's valuation for the debt equally and that's what i call the more money way and this is what i mean about management paying down the debt rapidly they have a rapid deleveraging target so there's two ways that you can sort of think about debt the one way is it's never going to get paid down and even if it does get paid down it gets paid down 10 years from now so you should discount that value of the debt by at least 10 years so that's one way to sort of think about it but you can't really do that in this situation because management has told you that they're aggressively deleveraging and so the only way that they're going to aggressively de-leverage is by using the free cash flow that you generated in those early years and so you do have to sort of reduce that valuation by the debt that's on the balance sheet now you don't have to do all of it you can sort of take 40 of it which is what they're looking to de-leverage the debt by and then sort of discount up the remaining 60 but i'm just gonna do 100 because i'm conservative and so the question is because the intrinsic value is just a little bit over 50 percent greater than what the current share price is you might not feel comfortable because there's a lot of questions to still be answered like are the results coming down how is competition going to be impacting this company et cetera et cetera and your answer is as good as mine and so you might want to buy this at a price lower than 15 per share and i wouldn't blame you and so one of the ways to sort of look at this is with cash secured puts i love utilizing cash secured puts and so you can see from the cash secured puts that if you're like me and don't want to buy it at that 15 per share range and rather get a larger margin of safety take a look at the six month cash secured puts the january 2023 12.50 per share cash secured puts they have an annualized yield of 21 or a 10.4 simple yield and so that's that 12.50 where you can probably sell it for a dollar 30.
the net purchase price would be approximately 11.20 per share and compare that with the current share price of 15 per share so it's a huge discount to what it's currently trading at and that reflects a free cash flow multiple of 5.6 times free cash flow and reflects a yield of 17.7 and so all of this information is actually modeled out in the tracker and of course the model for wbs is in its own sort of tab and which is linked to the tracker so you can get access to all of that and so the question is how do you get access to it well you can access all the models at the lower tier of the patreon and if you are interested i put on a live presentation each month where i reserve my absolutely best work for and you can get access to that call at the upper tier of the patrons and join us on a live zoom call every month where you actually do get an opportunity to ask me questions live one-on-one and as usual like i always say if you do try out the patreon and you decide it's not for you no problem let me know before you unsubscribe so i can fully refund the money that you use to pay for that first one because i don't want you to pay a dollar if you don't get any value out of it and up until now nobody's taking me up on that offer which makes you feel really good because it tells me that what i'm providing is of an immense value now the other thing that i want you to be aware of this isn't michael bury's only big investment opportunity i actually covered another one which you can get to right here
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