Qurate Retail Issues New Preferred

Qurate Retail Group (QRTEA and QRTEB) has announced that they will pay a common stock special dividend with preferred shares as well as cash.

The company is the parent of retailers QVC and Zulily, as well as other retail brands.

The new $100/share preferred will be an 8%, cumulative preferred and the company has applied for listing of the shares on NASDAQ.

Here you can find the company press release with some of the details of the issue.

I have not had time to do any due diligence whatsoever on this issue but at 8% maybe someone has an interest.

Tickers etc are available in the press release above.

Bob-in-DE dredged up this issue.

7 thoughts on “Qurate Retail Issues New Preferred”

  1. Expected this Week.
    Qurate Retail (QRTEA) to distribute Preferred Shares (QRTEV) to its shareholders. Sep 15 ex-date. The distributed security is not
    eligible for Russell indexes. Index managers will need to sell all the
    shares of QRTEV received through their ownership of QRTEA.
    Hearing 489,374 would need to be sold.

    1. The issue has been rock steady at 104-6 and the must sell shares are only about 4% of the issue. Will be interested to see if it slips.

      I’m still not a buyer.

  2. QVC is on constantly in my house and we get at least 2 deliveries from them per week. They also recently called one of their bonds. A 5.125% that matured 7/22.

    1. Shopping from home has gotten a big boost during this pandemic. The QVC concept seems a little bit dated, but the lack of in store shoppers may drive some more name brand retailers to try it, especially to move excess inventory.

      1. I have an e-com mattress and outdoor furniture business and one of my manufacturuer sells their mattresses on QVC. I had no clue how big of a business QVC is until I got to know them. It might be dated, but they move incredible volumes. They have multiple channels now and pretty much own the space.

  3. Thanks, Tim.

    This is one strange issue, folks. Before you leap at that 8% coupon have a good look at the company. It’s mostly online specialty retailing, carries a ton of debt (even before this issuance) and has an S&P rating on the straight debt of BB-. This issue is not yet rated but at best it would come in at a B+.

    Oddities:

    The company did not sell this issue; it is a dividend to existing common holders. The issue is 12.44 million shares if I did the math correctly and at a $100 liquidation preference is effectively $1.244 billion.

    I don’t care about the accounting but the economic effect is to more $1.2 billion from equity to debt. At the same time the company is paying a $633 million special dividend in cash.

    So what you have here is a retailer, in the midst of covid, removing $1.8 billion in equity and replacing it with $1.2 billion in debt. It almost seems suicidal. If anyone knows something I don’t know please come forth.

    Aside from the above, the issue has a lot of quirky features which you can get from either the SEC filings or the companies website.

    I’ll be interested to see if S&P rates this thing.

    Trading in the 105 range late today. To me, it’s a trader. If the thing sells off heavily I might be in for 100 shares but as a long term hold, no way.

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