Thread by @aleksndr_a

Mark Robichaux’s profile of John Malone in Cable Cowboy is an absolute gold mine. Here are a few of my favorite passages.

amazon.com/dp/047170637X/…

Malone was stalwart about building long term value through leveraged cash flow. Earnings didn’t count. He wasn’t constrained by quarterly expectations.

“If you’re going to ask about quarterly earnings, you’re at the wrong meeting, and you probably own the wrong stock.”

Malone built the pipes, then bought the water that flows through them. By becoming the gatekeeper with access to subscribers, he could negotiate equity stakes in the channels, gaining huge financial upside.

Malone took spartan operations to another level. Absolutely no bureaucracy. No waste. It actually sounds pretty dreamy.

“We don’t believe in staff. Staff are people who second-guess people.”

Always protect the mothership. He used a web of subsidiaries to spread risk, so if one went down, it didn’t sink the whole ship.

Lesson: when you find a good manager, keep them in power and trust them implicitly.

Malone averaged one M&A deal every two weeks over 15 years. That’s insane. These guys were slinging billion dollar deals like bowls of breakfast cereal. Oh, and TCI shares rose 55,000%.

One of the best parts of the book is Robichaux’s exploration of Malone’s complex personality. It’s not just a fawning glow piece. Malone is cast as a monster as much as maven; an isolated sociopath as much as loving family man.

This, from rival Sumner Redstone.

When his company was struggling, Malone would pull grandiose visions of the future out of thin air to create diversions. Sound like a familiar tactic?

Peter Thiel says monopolists lie. They expand the size of the pond to create the illusion they’re a small fish. Here it is in action.

Love em or hate em, anyone who has ever worked with consultants can appreciate this line:

“A lot of it was touchy-feely teamwork drivel that brought scorn in the ranks of TCI.”

In Malone’s game, you can’t just be a buyer of assets. You deliver value to shareholders when you sell. Until you sell, share price is just a reflection of hopes unrealized and promises unfulfilled.

Malone harped on using shares instead of cash as currency for acquisitions. It lowers the price for the buyer yet raises the price the seller receives. It’s like M&A alchemy. How? Tax efficieny.

If you give managers equity ownership, they can focus of fighting for economics rather than wasting energy fighting for control.

Malone used calls and puts to hedge his personal equity positions. Is this common? I’ve never heard of a CEO using options to hedge a personal stake.

Malone eventually became one of the largest private landowners in the US and was the first to put cattle on the blockchain (Just kidding. But seriously.)

“With advanced barcode machinery and other tracing methods, Malone could track each cow’s offspring...”