Liberty Global: How a High-Conviction Idea Became a 165% Options Win

Group 1 - The core investment thesis for Liberty Global is based on the belief that the company, under the leadership of John Malone, is shifting its strategy to "de-conglomeratize" and unlock shareholder value through asset spin-offs, with an expected upside of 50% to 150% over the next few years [2] - The stock has performed well, increasing approximately 26% since the recommendation, aided by the spin-off of Sunrise, Liberty's Swiss telecom company [2] - The use of options in this investment strategy transformed a respectable return into a significantly higher one, demonstrating the effectiveness of combining special-situations research with smart options structuring [3][4] Group 2 - The synthetic long position was established by buying a call and selling a put at the same strike price, with a net cost of $209 per contract, replicating the economics of owning the stock outright [4][6] - The intrinsic value of the January 2026 call is currently $3.59, and the short put is expected to expire worthless unless the stock declines by 33% [5] - The total return from the synthetic long position alone is +72%, which was further enhanced by selling out-of-the-money calls, resulting in a total return of +165% when including additional income generated [7][8] Group 3 - The lessons learned from this investment include the amplification of returns through options in special-situations investing, the continued validity of the original de-demerger thesis, and the impact of spin-offs on option chains, which can affect liquidity and income generation opportunities [9][10][11]