Diller Discount Hurts Common Shareholders

There's a reason why IAC/Interactive (IACI - commentary - Cramer's Take) is a terrible investment and has been a terrible investment besides the earnings misses and the pastiche of businesses that even Barry Diller now recognizes don't belong together. The reason is that every time you hit it up or hear about it, there's some complication somewhere in the ownership structure that makes you think you are just some dumb shareholder caught up in an endless restructuring and shuffling game.

The latest non-operating issue is this tiff with Liberty Media (LINTA - commentary - Cramer's Take). First, what the heck is Liberty doing here? Why were they still involved? Why do they have such power? Is Diller not in charge of the company? Why is John Malone calling the shots instead of the board and CEO of IACI?

Cramer: Barry Diller's IACI? Don't Do It

Second, why was there a private transaction with one shareholder -- IACI took someone out of the stock -- but no buyback otherwise, when Diller said repeatedly the company was underestimated and undervalued at much higher levels?

Third, why does Diller always have to stay in motion, selling this, buying that, spinning this out, taking that back in? What's the matter with just operating a business? What's the obsession with moving things around, wheeling and dealing and accomplishing nothing?

Fourth, if it is so obvious now that Home Shopping doesn't go with Lending Tree or with Travel or with whatever else is buried in the company -- Wall Street Journal joint venture, for instance -- why wasn't it so obvious six months ago when Diller was telling everyone what a perfect combination all of this was?

Diller, alas, has NO credibility with the Street whatsoever. But at precisely the time when he needs the most friends, he has totally alienated everyone.

This is a sum-of-the-parts story where the parts aren't worth much and the sum isn't worth much. I hope I am proved wrong, but Diller has put together a series of businesses that really are just cats and dogs. Ticketing seems to be some sort of overall theme, I guess. I can't come up with much else.

We used to speak about a Diller Premium. But then again, we used to speak about a lot of things that don't exist any more.

This is just one of the smaller ones, the Diller Discount, and it doesn't matter much ... unless you are one of his hapless, non-Malone shareholders.

Random musings: IndyMac's (IMB - commentary - Cramer's Take) real bad, but the company will never stop saying things are fine, even as they cancel the dividend. This one jumps the queue of bad common stock paper now.

At the time of publication, Cramer had no positions in the stocks mentioned.

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