QVC Group At A Crossroads: Time For Some Game Theory

Summary

• Qurate’s business continues to deteriorate, with revenue and OIBDA sharply down and customer counts falling, driven by secular headwinds and digital disruption.
• The company faces a looming debt crisis, with complex layers of debt and securities trading at distressed levels, and bankruptcy risk is real and rising.
• Game theory suggests likely liability management exercises or restructuring, with potential for selective recoveries in preferred stock and certain bonds, but outcomes remain highly uncertain.
• Given the extreme risks and volatility, only highly speculative investors should consider TopCo securities, while most should remain cautious amid ongoing uncertainty.

gsheldon

Since I last profiled the ongoing saga of Qurate, QVC’s (NASDAQ:QVCGA)(OTC:QVCGB) common stock price has declined about 90%, while trading in their various other securities has also been volatile with significant downward pressure. After over two

Analyst’s Disclosure:I/we have a beneficial long position in the shares of QVCGA, QVCGP either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.