The CEO of Liberty Media doesn’t see an on-off swap for Covid: He’ll linger
Greg Maffei, CEO of Liberty Media, told CNBC Thursday that the economic recovery from the coronavirus crisis will be mixed across industries, potentially creating investment opportunities for the sprawling media, sports and entertainment company.
"The pandemic will continue in our opinion. This will not be an on or off switch in economic terms," Maffei said in "Squawk on the Street." "There will be different segments that come out slower."
Some hope that the widespread availability of a Covid-19 vaccine will cause the economy to fall behind before a pandemic. For Liberty Media, which owns the Atlanta Braves and has a large stake in Sirius XM, the likelihood of variable recovery is one reason Liberty formed a special purpose vehicle, according to Maffei. "I think there will be chances," he said.
Liberty Media Acquisition, which was filed with the Securities and Exchange Commission Thursday, intends to raise $ 500 million which will then be used to acquire a private company in a process sometimes known as a reverse merger to go public. SPACs have seen a surge in popularity during the pandemic.
"One of the reasons we have the SPAC, one of the reasons we think about it, is to think about the investment opportunities that can come from the consequences of the consequences of the consequences," said Maffei, a reference to a line of one 2003 presentation by Charlie Munger, Berkshire Hathaway vice chairman.
Liberty Media is assessing the coronavirus pandemic in a similar way to how it has invested in the digital and mobile revolution over the past 10 to 15 years, Maffei said. It focuses on "how this will either speed things up, hurt other things, or whether the market has overestimated the impact".
Travel is an area where fundamental changes may arise "as a result of the global Covid-19 outbreak". Business travel in particular will not return to pre-pandemic levels for "a very, very long time" Microsoft co-founder said he believed 50% of business travel will "go away" as a result of the pandemic.
"On the other hand, I believe that vacation travel can actually be accelerated," said Maffei. "People's desire to come out and try something different, especially if you have the means, will come back. We try to weigh all of these parts."
Liberty Media shares were slightly higher on Thursday lunchtime, trading at $ 42.87 per share. The stock is down more than 10% this year.