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Malone, chairman of Liberty, plans to execute a ‘collar transaction’ on almost 2.5 million shares of Series C Liberty Formula One Common Stock (FWONK).
The SEC document reveals Malone sold more than $24 million worth of FWONK shares last month.
On May 10, the Liberty boss divested almost 90,000 shares at $70.53, a transaction valued at $6.344 million.
Just three days later, he sold a further 139000 shares at $68.98, followed by another transaction the next day of just under 121000 shares for $69.70.
A total of 350,000 shares were sold across the three transactions.
According to the SEC document, Malone is now seeking to sell 2,446,552 shares, which have an aggregate market value of $182,317,055.04, equating to $74.52 a share.
The shares are held across two trusts, one in Malone’s name and another in that of his wife, Leslie.
The intent is to sell these shares by means of a collar transaction, sometimes known as a hedge wrapper or risk-reversal, to protect a $15.546 billion holding.
A collar transaction is a strategy employed by an existing shareholder (or asset holder) designed to protect against stock price deflation.
Typically, this is done by those who are confident in the stock’s long-term value but want to safeguard against short-term market turbulence.
However, while protecting against potential share price drops, a collar transaction also limits the value the shares can be sold for. As such, it is usually a temporary strategy.
The timing of the move is interesting as it coincides with work by Liberty Media in acquiring Dorna, the commercial rights holder to MotoGP.
Valued at AUD $6.9 billion, that deal requires regulator approval in a number of markets, including Australia.
There also remains persistent speculation of Liberty’s commitment to Formula 1, fuelled in part by the Dorna acquisition, though that has been scoffed at by the business.
In the United States, F1 has also garnered unwanted attention from Congress and House Judiciary Committee over its decision to reject Andretti Global’s bid to join the grid for 2025.
Liberty Media is also currently party to a lawsuit involving Live Nation in the United States for alleged “unlawful, anticompetitive conduct to exercise its monopolistic control over the live events industry in the United States at the cost of fans, artists, smaller promoters, and venue operators.”
Liberty Media holds a 30 percent interest in Live Nation.
Malone is estimated to have a net worth in excess of $9 billion and is one of the largest individual private landowners in the United States.
The 83-year-old founded Liberty Media, which owns Formula 1’s commercial rights, in 1991 and alongside F1, holds interests in Sirius XM and Live Nation, among others.
In February, Liberty Media revealed 2023 revenues of $8.95 billion with a net income of $1.26 billion.
