Liberty Starz: A $50 Stock

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Liberty Starz, the publicly traded entity that includes Starz Entertainment and other former Liberty Media businesses, had a strong debut Nov. 20 on the NASDAQ Global Market System, finishing the day at $50.25 per share, up 5% ($2.41 per share) from its when-issued close of $47.84 on Nov. 19.

The stock, which trades under the symbol “LSTZA,” continued to climb in later trading — it closed at $51.16 each on Nov. 23, up 1.8% or 91 cents each.

Liberty Starz was created after the Nov. 19 spinoff of Liberty Entertainment; its assets include the premium service Starz, as well as satellite high-speed data service WildBlue Communications; online services PicksPal, Fanball, FUN Technologies; and about $650 million in cash. Starz management has said it expects the premium channel to report 5% to 10% cash-flow growth and revenue growth of between 3% and 4% in 2010.

The stock began trading on a when-issued basis on Nov. 5 and prices ranged from $50.10 to $46.10 per share.

Pali Research analyst Rich Greenfield began coverage on the stock Nov. 19 with a “neutral” rating. Greenfield wrote that while the stock appears inexpensive, “despite its recent rapid appreciation, we believe its future earnings trajectory and use of capital are far too uncertain to warrant a 'buy’ rating.”