Outstanding shares of Liberty Ventures Group (LVNTA) fell 14.2 percent last week despite a new stock buyback plan as investors reacted to news that it had issued 67.7 million of its shares for the assets of Backcountry.com, Bodybuilding.com and several other e-commerce businesses and $1 billion in cash in a $2.5 billion transaction with affiliate Liberty Interactive Corporation.
Although LVNTA authorized the repurchase of up to $650 million of its stock Thursday, its shares fell another $1.07, or 3.7 percent, by end of the day Friday amid a broad correction in stock prices tied to growing anxiety over the direction of U.S. interest rates and emerging markets.
After closing the sale, Liberty Interactive renamed itself QVC Group and applied to the NASDAQ Stock Market to change the trading symbols for its stock from LINTA and LINTB to QVCA and QVCB. QVC Group said it will pay out the Liberty Venture shares it received in the form of a special dividend to shareholders of record as of Oct. 13 according to a previously announced plan to unlock the value of its home shopping business, which consists of QVC and a 37 percent stake in HSN (Home Shopping Network).
The $2.5 billion transaction valued Liberty Interactive’s E-commerce Businesses, which comprise Backcountry.com, Bodybuilding.com, CommerceHub, Evite and The Right Start, at $1.5 billion. The sum excludes Provide Commerce, which Liberty Interactive agreed to sell to FTD Companies, Inc. in a separate agreement.
Liberty Interactive never broke out financial results for its individual e-commerce businesses, but executives have attributed declining earnings at the business in part to tough conditions facing Backcountry.com since the fourth quarter of 2011, when one of the driest and warmest winters in a century forced many outdoor retailers to mark down winter products steeply.
In August, Liberty Interactive reported its E-commerce Businesses again failed to meet expectations in the second quarter ended June 30, despite a 10 percent increase in revenues, which reached $481 million. While Provide Commerce, Backcountry.com and Bodybuilding.com all increased revenue, they fell short of expectations due to soft demand for their products and slightly lower average order values, Liberty Interactive reported. The company attributed a 27 percent decline in income before depreciation and amortization at the segment to increased spending on marketing, personnel and technology that failed to yield expected revenue growth as well as slightly lower product margins, increased packaging costs and increased returns.