Warren Buffett’s investment firm, Berkshire Hathaway, has increased its stake in Sirius XM Holdings to 32%. The company purchased roughly 3.6 million shares for about $87 million in separate transactions. This move comes after billionaire John Malone’s Liberty Media completed a deal to combine its tracking stock with the rest of SiriusXM.
As part of Malone’s media empire’s reshuffling, the conversion allowed holders of Liberty SiriusXM stock to receive 0.8375 shares of Sirius XM for each share held. On Sept. 10, Sirius XM Holdings announced that it had started a new chapter as an independent company after closing its transaction with Liberty Media.
In August, SiriusXM reported losing 100,000 self-pay subscribers in its satellite radio unit in the second quarter, down from the 130,000 drop recorded a year ago. The company’s revenue fell 3% from a year ago to $2.18 billion.
Berkshire Hathaway expands SiriusXM investment
Chief Financial Officer Tom Barry said, “Our primary objectives are to continue to invest in our subscription business through enhanced consumer experiences, expand advertising opportunities, and deliver healthy margins and robust cash flow. We are committed to delivering our financial guidance and executing our strategic plan with precision and discipline.”
Veteran trader Ed Ponsi weighed in on SiriusXM’s acquisition of the popular podcast “Call Her Daddy,” hosted by Alex Cooper, in a deal reportedly valued at $125 million. Ponsi described the acquisition as “a move of desperation for SiriusXM” and suggested that SiriusXM needs to keep the spotlight on Cooper to maintain her relevance and popularity for the deal to pay off.
JP Morgan recently reinstated coverage of SiriusXM with an underweight rating and a $20 price target. The firm praised the acquisition of Liberty Sirius due to improved trading dynamics and a 12% share count reduction but expressed concerns regarding SiriusXM’s long-term growth algorithm, given the uncertainty around sustainable long-term self-pay subscriber growth. Sirius XM is scheduled to report results on October 31. The company’s stock recently went up 8.7% to $27.10, although shares are still down 51% year-to-date and off nearly 44% from a year ago.
