Please ensure Javascript is enabled for purposes of website accessibility

A Lot Has Happened to Sirius XM in 11 Years

By Rick Munarriz – Feb 11, 2020 at 9:15AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The satellite radio provider bottomed out at $0.05 on Feb. 11, 2009. It's a 144-bagger now.

When it comes to anniversaries, today is an important one for Sirius XM Holdings (SIRI 0.17%) investors. It was on this day 11 years ago -- Feb. 11, 2009 -- that the satellite-radio provider bottomed out at $0.05 a share.

There was a lot of negative noise swirling at the time, and Sirius XM itself wasn't shying away from the possibility of filing for bankruptcy. The merger between Sirius and XM had been completed months earlier, but the drawn-out process to clear regulatory hurdles left the deficit-saddled monopoly smarting for cash. A bidding war took place to bail Sirius XM out, and while it ultimately had to hand out a sizable position to what is now majority stakeholder Liberty Sirius XM (LSXMA -0.05%) to get it through a rough financial patch, you'd be lucky if you picked up shares of Sirius XM for a nickel apiece 11 years ago. The stock is a scintillating 144-bagger since hitting rock bottom.

Melissa McCarthy and friends on her Sirius XM radio show.

Image source: Sirius XM Holdings.

A whole new world

Things have obviously changed over the past 11 years. Sirius XM has been consistently profitable since 2010, and it now watches over an empire of 34.9 million total subscribers. It acquired streaming music pioneer Pandora last year, giving it a new platform to reach more listeners. 

The milestones are meaty. Despite the arrival of connected cars with seamless access to smartphone music apps, Sirius XM has managed to add at least a million self-pay net subscriber additions in each of the past 10 years. The stock has had its ups and downs, but it has somehow delivered 11 consecutive years of positive returns. Sirius XM also pays a dividend, and it has boosted those payouts by 10% in each of the three past years. 

There probably aren't too many investors that have held Sirius XM over the past 11 years, relishing the 144-bagger from its bottom. The shares are actively traded, and over the years we've seen the ownership base migrate from penny-stock speculators to more conventional growth and income investors. 

The trade-off here is that Sirius XM has matured from the speed freak it was a few years ago. It expects revenue gains to slow to a 4% clip in 2020. The 900,000 self-pay net additions it's looking to add this year would be the first time in more than a decade that it doesn't come through with seven-digit growth in its premium subscriber base. Sirius XM has historically been conservative with its guidance, but it's clear that organic growth will decelerate this year. Sirius XM has gone from a speculative situation to as close as you can get to a blue chip stock in the radio industry, and Feb. 11 will continue to be a day worth toasting no matter when you bought into the stock. 

Rick Munarriz owns shares of Sirius XM Radio. The Motley Fool recommends Sirius XM Radio. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Sirius XM Holdings Inc. Stock Quote
Sirius XM Holdings Inc.
$5.82 (0.17%) $0.01
The Liberty SiriusXM Group Stock Quote
The Liberty SiriusXM Group
$37.47 (-0.05%) $0.02

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.