Why a Sale Makes Sense
By no means am I an expert in the stock market, but with some research and looking in the right places, it doesn’t take one to connect a few dots. A year before SunTrust Park (and The Battery Atlanta) opened, Liberty Media went public on the stock market with the Braves, unveiling three series of tracking stock.
By the time the tracking stocks were released (April 2016), potential investors had a pretty good idea of the direction SunTrust Park (and The Battery Atlanta) was headed. While purchasing tracking stock doesn’t signify ownership in the team, it does reflect the financial performance of the team (and The Battery), which is precisely what investors (or potential buyers of the team) would care about.
Because of The Battery Atlanta, buying the Atlanta Braves is just as much a real estate investment as it is an investment into the team itself. Oversight of and revenue drawn from The Battery will be the driving force in a sale of the Braves, which could be coming very soon.
A few weeks ago, I posed the question: How long had the MLB’s investigation into the Braves been going on before it was announced? My reasoning behind this question was that I believe there may be a sale in the works and that the investigation may have pumped the brakes on a potential deal.
According to former portfolio analyst and current Senior Financial Analyst, Jason Starling, the idea of a sale happening soon may not be too far-fetched. When reached out to about the situation, Starling said, “Given the circumstances surrounding Liberty Media’s original purchase of the Braves, as well as the current value of Atlanta Braves tracking stock, relative to earnings, I think a strong case can be made that a team sale is imminent.”
MLB’s 2016 GM Meetings lasted from November 7th through November 10th, 2016. On November 10th, 11th, and 14th (the 12th and 13th were Saturday-Sunday). Respective volumes for Liberty Media’s Braves Series — A tracking stock (BATRA) on the stock market were 104,246, 101,230, and 130,957, and the stock’s price spiked from $17.12 a share to $20.31 a share, and this number has since served as a makeshift “floor” for the stock.
From January 4th to January 17th, 2017, the price of the Braves’ tracking stock fell from $20.90 a share to $19.54 a share, and then rose. Then, from January 23rd to February 8th, the stock fell again from $21.70 a share to $19.45 a share.
After these back-to-back fluctuations, the tracking stock slowly climbed throughout the year to $26.08 a share, before falling dramatically from this amount the day after John Coppolella resigned (October 3rd) to as low as $21.69 a month and a half later on November 5th. The stock rose again from $21.77 a share to $23.65 a share just weeks after the conclusion of the investigation (and the Braves’ punishment) was announced.
To me, the back-to-back drops in January and February signify that something may have been going on regarding MLB’s investigation of the Braves, and the spike just after the announcement of the conclusion of the investigation further supports that.