Debt And Interest ExpenseThe $5.5 billion in new debt raised in anticipation of the Endeavor deal is a burden to interest expense.
Shareholder ReturnsWith the announcement of the Endeavor acquisition, FANG decreased its shareholder returns payout from approximately 75% of free cash flow to 50%, as it strives to reduce pro-forma net debt.
Stock ValuationThe strategic logic and monetization opportunities of the Endeavor deal are largely reflected in FANG’s current share price, leaving minimal upside to fair value.