Warren Buffett’s Berkshire Hathaway purchased another 2.3 million shares of satellite radio giant Sirius XM, bringing its total stake to 105 million shares and 35% of the company. Sirius XM Holdings Inc. operates the country’s only FCC-licensed satellite radio service, offering over 200 channels of music, news, talk, podcasts, sports, and entertainment.
Sirius gained its independence in 2024 after shedding Liberty Media through a series of transactions. This ultimately gave Sirius XM its freedom and a much simpler capital structure since September 2024. It also enables the company to undertake strategic options and even be acquired as it faces tough competition from podcast services like Spotify.
While investors often assume Warren Buffett is making the decision when Berkshire Hathaway buys a stock, that’s not always the case. Ted Weschler, a former hedge fund manager who now works as a portfolio manager for Berkshire Hathaway, has been leading the investment in Sirius XM. With over a 35% stake in the company, it looks like a long-term investment or even a potential acquisition down the road.
Buffett’s SiriusXM stake increases to 35%
Sirius reported Q4 2024 EPS of 83 cents, beating consensus estimates by 17 cents. However, revenues fell 4.3% YoY to $2.19 billion, driven by lighter subscription and advertising revenue.
The company reaffirmed guidance for the full year 2025 with revenues of $8.50 billion, adjusted EBITDA around $2.6 billion, and free cash flow of $1.15 billion. Sirius is targeting another $200 million in run-rate savings by year’s end 2025 to build on the $350 million achieved in 2024. The company also launched its service in Tesla and Rivian electric vehicles in December 2024, leveraging its 360L technology.
Sirius XM’s 360L is its latest platform that enables both satellite and streaming delivery, allowing subscribers to access a larger library of content on demand and get personalized recommendations. SIRI stock’s average analyst target is higher by 23.56%, with six analysts providing Buy ratings and two Hold ratings. The stock has a 1.39% short interest.
Bullish investors can consider buying at the Fibonacci pullback support levels. If assigned the shares, then writing covered calls at upside Fibonacci levels can provide additional income along with the 4.25% dividend.
