Billionaire Steve Cohen Tops Warren Buffett In Starz
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Billionaire investor and founder of SAC Capital, Steve Cohen, has topped fellow billionaire Warren Buffett as one of Starz (NASDAQ: STRZA)'s biggest fund owners. Cohen has disclosed a 2,000% increase from the number of Starz shares he owned at the end of the third quarter, going from only owning 286,927 to over 6.3 million shares, or 5.7% of the company. At the end of the third quarter Buffett only owned 5.5 million (check out Cohen's profile and holdings here).
Earlier this year billionaire Ken Griffin of Citadel Investment Group joined Steve Cohen as an investor in TiVo, and now the two have another TV-related stock in common, Starz. Both stocks have been speculated at potential takeover targets (read more about Cohen and Griffin's TiVo investment)
Of the premium content providers, there is Starz, HBO -- owned by Time Warner Cable (NYSE: TWC) and Showtime -- owned by CBS (NYSE: CBS), both of which could be potential buyers of the newly spun-off Starz. Another potential suitor could be Comcast (NASDAQ: CMCSA). The Comcast-NBC giant could use Starz to add a premium network to its portfolio. The takeover is especially compelling when you look at how the enterprise value of how the other companies stack up to Starz:
| $ in billions | Starz | CBS | Time Warner | Comcast |
| Enterprise Value | $1.69 | $25.38 | $49.14 | $85.53 |
Things have not panned out as planned so far, and multiple pressure still exists, where Starz still trades at a hefty discount to peers:
| Starz | CBS | Time Warner | Comcast | |
| Price to Earnings | 1.2 | 18.1 | 19.1 | 17.4 |
| Price to Sales | 0.7 | 1.8 | 1.6 | 1.7 |
Over the interim, the company should be able to able to see price appreciation as investors realize Starz's depressed valuation, especially with billionaire investors taking notice. Beyond that, there is the potential for a takeover. Eugene Huang of Artemis Capital had this to say about the likelihood of Starz being acquired...
Starz will be the only standalone premium pay TV channel. HBO is owned by Time Warner, and Showtime by CBS. It doesn't make any sense to stand alone on its own. Starz could easily be acquired by Disney or Sony, News Corp, Viacom, Time Warner, CBS, or Comcast/NBC. DirecTV previously tried to acquire Starz in 2009 but couldn't agree on a valuation. Management has already indicated that this is a possibility already being explored.
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