Could a lawsuit against an entertainment and Internet heavyweight hurt a couple exchange traded funds (ETFs)?
Liberty Media (LCAPA) is suing IAC/InteractiveCorp (IACI) Chairman Barry Diller. The company wants to gain control after Diller proposed breaking IAC into five companies. Liberty Media holds 30% of IAC’s shares and 62% of its voting power. The company owns the QVC and Starz channels.
The back-and-forth has been going on since last week, report Sophia Pearson and Oliver Staley for Bloomberg. IAC filed on Jan. 23 that Liberty threatened to block the breakup unless the deal was structured to give it control of the new companies. Liberty volleyed back the next day, accusing IAC of trying to dilute their voting power.
Which way this goes remains to be seen, and it’s worth keeping an eye on two ETFs that count Liberty Media as top holdings. PowerShares Dynamic Leisure & Entertainment (PEJ), of which Liberty is 5.8%. It’s down 8.6% year to date and 15.8% over the last three months. PowerShares Dynamic Media (PBS) contains Liberty as 5.6% of its holdings. The fund is down 7.6% year to date, and 17.9% in the last three months.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.