What Do Sirius XM Investors Do Now?

Sirius XM is on the verge of being acquired, but it's never as easy as that.

Jan 6, 2014 at 12:48PM

Shares of Sirius XM Radio (NASDAQ:SIRI) opened nicely higher today after Liberty Media (NASDAQ:LMCA) flexed its majority control of the satellite-radio provider to propose an outright acquisition.

Liberty Media's plan -- revealed after Friday's market close -- offers only a meager premium to where the stock was at, but it's not as if Sirius XM has much of a choice. A special committee of Sirius XM's independent directors will consider the deal and a majority of non-Liberty Media investors will need to vote in favor of the transaction, but Liberty Media won't be denied. The stock would crater if it dumped its shares, and nobody wants to see that.

This was always a possible scenario when regulators cleared the way for Liberty Media to grow the initial 40% preferred share stake that it received for its shrewd financing move in 2009 to more than 50% of the media giant. 

One would think that independent directors and shareholders outside of Liberty Media would prefer to hold out for kinder terms, but we all know who holds the ultimate leverage here. At least one legal eagle is rounding up a class-action lawsuit to get Liberty Media to pay more for Sirius XM, but John Malone and Greg Maffei didn't assemble Liberty Media's eclectic empire of assets by overpaying. If anything, seeing the market take Liberty Media's stock lower on the news this morning suggests that its shareholders think that it's already paying too much.

Then again, it could also be the market realizing that the allure of Sirius XM won't be the same if it doesn't have a low share price and trades as a pure play. The proposed transaction over the weekend would make Sirius XM 39% of the new Liberty Media and that may not be enough skin for shareholders who have bought into the potential of satellite radio and won't care for slower growing media properties.

Sirius XM has never been boring, and if these are the last few months of it as a stand-alone entity, you can rest assured that its final act won't be a boring one either.

There's big money to be made in big media
Television, as we know it, is on the verge of a transformation. The companies that prevail in this epic disruption could go on to earn their shareholders untold sums of money. And the companies that lose could very well end up in bankruptcy court within a matter of years. With this in mind, our top technology analysts created a groundbreaking free report that sorts out the likely winners from the losers. In doing so, they reveal the handful of companies that are best positioned to make their shareholders exceptionally rich over the next few decades. To download this invaluable free report before the rest of the market catches on, simply click here now.

Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool owns shares of Liberty Media. and Sirius XM Radio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information

Compare Brokers