6. Liberty Broadband Corp. (NASDAQ:LBRDK)
Number of Hedge Fund Holders: 70
Liberty Broadband Corp. (NASDAQ:LBRDK) is a communications-focused holding company with investments in Charter Communications and GCI Holdings. It provides broadband, video, mobile, and enterprise services. Through its Charter segment, it delivers Spectrum-branded internet, TV, and mobile solutions, while GCI Holdings focuses on connectivity services in Alaska and caters to residential, business, and governmental clients.
The GCI segment of the company surpassed $1 billion in revenue for the first time in 2024. This was driven by a 5% increase in revenue during Q4 and a 4% increase for the entire year. This was fueled by strong data revenue, particularly from upgrades in rural Alaskan schools and healthcare corporations. While revenue surged, GCI experienced a slight decline in its consumer base, with a loss of 300 wireless subscribers and 4,900 cable modem subscribers. The latter is largely attributed to the expiration of the ACP program.
To support its expanding network, especially in rural Alaska, GCI invested $193 million in capital expenditures during 2024. For 2025, this investment is projected to increase to ~$250 million, with a focus on enhancing middle and last-mile connectivity. This proactive approach to rural connectivity is crucial for securing government funding and fulfilling the build-out requirements of the Alaska plan. GCI is set to be spun off from Liberty Broadband Corp. (NASDAQ:LBRDK) in late Q2 or early Q3 of 2025, becoming GCI Liberty.
Conventum – Alluvium Global Fund is positive on Liberty Broadband Corp. (NASDAQ:LBRDK) due to its continuous strong performance. Here’s what the fund stated in its Q3 2024 investor letter:
“Liberty Broadband Corporation (NASDAQ:LBRDK) (up 40.7%), has investments in the broadband sector via Charter Communications and GCI Holdings, which represents Liberty’s Alaskan operations. Charter announced pleasing second quarter results. So far it has retained the vast majority of the former Affordable Connectivity Program (ACP) recipients (but this is yet to fully play out), its mobile business is gaining further traction (with a strong reception to its phone upgrade and service plans), and good progress is being made on cost management. Both Liberty and Charter’s share prices rose (by 15.0% and 16.6%) on the release of these results. But there was no cause for any change to our analysis nor valuation – and both still appeared cheap to us. Then, later in the quarter Liberty received a proposal from Charter to consolidate the entities (but excluding GCI). Liberty provided a counter proposal at a higher exchange ratio and that included GCI (which Charter’s initial correspondence suggested may be entertained). Depending on how the value of GCI is accounted, the consideration difference is around 20-25%, which is not insurmountable in our view. The proposed simplified structure makes sense and is likely to be appreciated by investors on both sides. On the day this was announced, it was not surprising that Liberty’s share price was up 28.4%, and Charter’s fell marginally (down 2.5%). In our view, only now after the strong price gains is Liberty’s trading price getting close to fair value. Accordingly, no action was warranted and our Liberty position now stands at 7.1%.”
