This Week in Sirius XM Radio

Satellite radio is always on the move with Sirius XM.

May 3, 2014 at 1:30PM

Things never get dull for the country's lone satellite-radio provider. Shares of Sirius XM Radio (NASDAQ:SIRI) moved nicely higher on the week, soaring 3.8% to close at $3.24. The move was a lot sweeter than the Nasdaq's 1.2% uptick. It's a pretty big deal. This is only the second time in the past 10 weeks that the stock has closed higher.

There was more going on beyond the share-price gyrations, though. Sirius XM raised a larger than expected $1.5 billion in new debt, and Liberty Media (NASDAQ:LMCA) and Sirius XM completed a stock purchase agreement. 

Let's take a closer look.

As good as it debts
Earlier in the week Sirius XM announced its intention to raise $750 million in new debt by issuing senior notes due 2014. The media giant has made the most of its improving fundamentals and credit ratings to swap out older debt with new obligations. However, this announcement didn't single out any actual debt that it would be replacing. This move was to raise funds for "general corporate purposes" that may include stock buybacks. 

Things got even more interesting on Thursday afternoon when it upped the offering to $1.5 billion. Sirius XM will be paying a modest 6% interest on the notes. The satellite radio monopoly has clearly come a long way. Just five years ago it was so strapped for cash that it had to hand over a 40% preferred share stake in the company to Liberty Media for the right to borrow a little more than a third of this amount at a 15% interest rate. That was a brilliant deal for Liberty Media. Now it's Sirius XM making the smart debt moves.

A company taking on new debt isn't typically a positive development, but it is in Sirius XM's case as it can use the money in part to lower its gargantuan share count. 

Give me Liberty or give me breadth
Part of Sirius XM's buyback efforts have involved purchasing some of Liberty Media's majority stake in the company. The plan was put on hold when Liberty Media made a buyout proposal in January, but it was clear that retail investors weren't going to approve the transaction, so Liberty Media bowed out in March. 

The ownership clarity gives Sirius XM the green light to continue to buy back stock from Liberty Media as it chows down its own shares, and on Monday it was announced that Sirius XM completed the purchase of $500 worth of its stock owned by Liberty Media. 

Investors hungry for a little more color on the transaction or what Liberty Media's plans are with Sirius XM may not have to wait long. Liberty Media reports quarterly results on Thursday, and it's a fair bet that the satellite-radio darling will come up either during prepared remarks or when analysts get a shot to ask questions.  

The biggest thing to come out of Silicon Valley in years
Satellite radio isn't the only cool gadgetry out there. If you thought the iPod, the iPhone, and the iPad were amazing, just wait until you see this. One hundred of Apple's top engineers are busy building one in a secret lab. And an ABI Research report predicts 485 million of them could be sold over the next decade. But you can invest in it right now, for just a fraction of the price of Apple stock. Click here to get the full story in this eye-opening new report.

Rick Munarriz has no position in any stocks mentioned. The Motley Fool owns shares of Apple, Liberty Media, and Sirius XM Radio and recommends Apple. Try any of our Foolish newsletter services free for 30 days. 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers