Sat. Radio: XM, Sirius Rise; Blogger Sees Big Gains If Deal Closes; Rumors On New XM Bidder (Updated)
Both XM Satellite Radio (XMSR) and Sirius Satellite Radio (SIRI) are trading sharply higher today on little news. The shares could be getting a boost, though, from a post today on Seeking Alpha, by investor Richard Dorfman. (The post has been picked up by Yahoo Finance.) Dorfman operates Richard Alan & Co., which describes itself as “a financial advisory and investment company.”
Dorfman’s writes that he anticipates the proposed merger of the two companies will eventually be completed, and that “the upside potential is substantial, with the resulting company well-positioned to become a powerhouse provider of audio entertainment.” Dorfman writes that he recently bought shares of Sirius for his own account. “I chose it over XM because I’m a big fan of Karmazin and I like the fact that Sirius achieved positive free cash flow in the fourth quarter of 2006 – two attributes which I believe make it better positioned than XM in the event the merger is quashed by the government,” he writes.
XM today is up 65 cents at $12.37; Sirius is up 12 cents at $3.10.
Update: As reader Bob points out in the comment section below, there’s also a report on TheFlyOnTheWall.com which says that XM was moving higher on “unconfirmed takeover speculation…There is chatter circulating on a competing bid for the company.” Not sure why Sirius shares would go up on a rumor that someone is bidding for XM, but whatever. Now you know.
Individuals are starting to wake up!! I love it!!!
Jesus Christ gave me His Oath on 3/27 that this deal will close. Read PROOF (Amazon), if you dare, to verify my infallable track record of prophecy when contradicting Wall Street. Either way, try to remember Jesus when Wall Street blows it again.
Hmmmm….Jesus told you that Xm and Sirius will complete their merger? This is a subject Jesus cares about?
Ummm, FWIW both Flyonthewall and Briefing picked up on a comment today from Pacific Crest that Xm has received a competing offer. Unfortunately, you guys are a little late and off on this one.
“10:54 EDT XMSR theflyonthewall.com: XM Satellite-XMSR moves higher on unconfirmed takeover speculation-Rumor
There is chatter circulating on a competing bid for the company. :theflyonthewall.com”
Eric is right in accurately responding to Paul’s comment that he received some sort of revelation about the proposed SIRI/XM merger. I agree that it is of no interest to God nor would he influence man’s decisions concerning stock market activity. Hopefully all will turn out well for investors in both companies. Only time will tell.
That’s not why both stocks went up today. That’s not even real news, it’s a perspective, there’s something deeper which we’ll never know.
When the merger goes through you will have wished you bought shares of Sirius.
Does Jesus care about XM? The Father has entrusted Him with ALL things. If you read Proof, your next move will be to sell your house, run up every credit card, cash in your kids college fund, and BUY XM NOW.
Oh, that’s some responsible advice right there, Paul. You are kidding…aren’t you?
Just look at the public comment input being sent to the FCC on the Merger.
Just about every political group is PRO merger. The total ratio is 75% PRO and only 19% Con.
Sorry Red Savage, but if youre absolutely convinced that the merger will go through, then you should know that you should not be buying Sirius - you should be buying Xm. Because youre convinced that the merger will go through and if it does, youll get 4.6 shares of Sirius for every one share of Xm. If you hold Sirius, you get nothing.
Xm right now, is way cheaper than Sirius. Xm is the play if you think the merger is a done deal.
Jesus says you cannot serve God and Money. He does say Seek first the kingdom of God and His righteousness and all these things will be added unto you.
Does anyone think if all you had was 3000 dollars should you invest in sirius
Sean what that hell are you doing by using God and Jesus name, this is blasfemy.
Stop this patetic argument, do not use the name of my God in vain, dont mix work, jokes, life games with something so serious. Stop this non sence now.
Paul H. my comments to Sean goes to you as well. You both dont know what are you playing with and how serious this is. Stop this non sence as well by using the name of Jesus Christ and God this is not fanny.
I asked about investing 3000 dollars in SIRIUS. Sean A I’ll call my self did not make coments about GOD.
Has anyone calculated the value of the LIVE EARTH exposure? Perhaps this has something to do with the sharp pop today. Or it could have been that I had a day off due to the holiday, and my staring at the the level-two all day and concentrating my brain waves helped it to go up???
That seems doubtful to me, Michael. The stocks pretty much seem to move on merger news at this point, and not much else.
Bob,Bob,Bob, How wrong you are.
Your saying taking a one time
bump of a couple of Bucks is
better than years of upside in Sirius. I don`t think so. Buy
Sirius and be patient.
Why not buy some of both and be covered at this point, both ways!
Well it doesn’t look good for consumers of traditional radio when someone describes XM Sirius as a “power-house provider of audio”. Can someone say monopoly? Working with the NAB, I’m convinced that a single satellite company is a bad deal for consumers as well as employees of radio stations. Here’s a link to help stop the merger.
http://xmsiriusmonopoly.org/
Jerry, a one time boost? Huh?
You buy Xm now, take the conversion and THEN continue to hold your new Sirius shares. Who said anything about taking a one time boost and then selling?
If you really believe the merger will be passed, then buy Xm now, take the conversion and then continue to hold. Youll be better off.
Example, you put $10k into Sirius at todays close of $3.07, you’ll get 3,257 shares. If the merger happens and the stock goes up 30% to $4.00, your $10k will be worth over $13k. Meanwhile I put $10k into Xm at todays close of $12.23, you’ll get 817 shares. But after the merger, those shares would be converted into 3,758 shares of Sirius. THEN we see the same 30% jump in stock price to $4, which will take my $10k investment up to over $15k.
Who did better? Your $13k or my $15k? So if you are absolutely convinced the merger will be approved, why in the world would you invest in Sirius? This is Merger101 basics here Jerry. You almost always buy into the company being acquired when there’s a premium being offered.
I’ve gotta agree with Bob on this one on the basic premise be it the case or not that a merger is imminent. While obviously a share of Sirius is a lot cheaper right now the potential of getting 4.6 shares of Siri stock for every share of XM held is a great opportunity. The merger will obviously create a jolt within the industry and essentially is guaranteed to boost Sirius’ stock by a somewhat substantial amount in which case its better to hold as many shares to maximize gains. Also the idea of buying into either of the two companies becomes moot because a merger would mean they become one company in the end.
Aaron..thats what has me confused…if i buy 300 of sirius and the merger happens…wouldnt those shares become part of the new company..and end up like 4.6 times higher than before..
the 4.6 shares are for only people that owned the stock before the merger was announced. If you buy them now you only get even money. It does not matter which one you buy if the merger goes through. But the stock you feel will be the better of the 2 if the merger does not go through.
You fellows are gloriously misinformed on all topics. Except for Bob. You are correct in your assertion that “if merger chances are 100% why invest in Sirius?” Im in Sirius not Xm bc, if denied, Siri will advance and XM will stagnate. Sirius’ momentum was robbed when tied to XM.
Fabio…The shares would still be a part of SIRI but if you invest in XM before the merger is finalized than for every share of XM you will receive 4.6 shares of SIRI which means the amount of gains made by the stock is increased because you have a stronger hand in the stock.
I own 1433 shares of XM and bought them 2 days after the merger announcement. So Jeff is saying that I wouldnt get 4.6 shares of Sirius. Thats not true right.
Let’s think about this for a second. How much since would it make if you did get the 4.6 shares after the merger was announced? (That was with a 20% premium. Roughly.) Everyone would sell SIRI and only buy XM. You only get the 4.6 if you owned the stock before the merger was announced and you must own the stocks until the merger is final to get the 4.6 shares of SIRI. If you sell the stocks before the merger is completed you do NOT get the 4.6 you only get an even exchange for the stock you own. Fabio once the merger is final and SIRI is at $4 per share and XM is at $16 you will own 5732 shares of SIRI.
Nabby. Shame on you. I worked in telecom for a long time…In that industry being a monopoly meant consumers had no choice and that the demand for goods/ services produced could not be otherwise produced. Basic economics of demand and supply…the spirit of the laws being to limit a single entity controlling this balanc. Now apply this thinking. Ummm consumers like me have a choice - delightfully many in fact. But you NAB types are to blame. You’ve merged and consolidated and worked consumers out of the equation so that we DEMAND more. Now you’re trying to tell consumers the guys offering us better content, diverse program are the bad guys? If they can consolidate and streamline program options and technologies to where I can choose from an even broader array, that’s bad? No sir! Where was your NAB when Clearchannel ruined radio? No one cried bloody murder then! NAB=MORONS. Consumers will be heard on ths issue!!
Those any one knows if all goes well what will be the value of sirius, lets say one year after the merger is approved (if approved of course).
I have read and seen many people talking that it will be about 15 dollars a year after, thoses any one agree with that, because I cannot see that happening not even 3 years after the merger, any one disagree?
Jeff, SO I will not get the 4.6 shares of siri since I bought after the announcement.
But were can I see that in an official paper or website. Do you or anyone Know?
I am not sure. sorry. It is one of the things I just know. I will look it up and see if I can get you an answer shortly.
Tech Trader Daily is a blog on technology investing written from Palo Alto, California by long-time Barron’s West Coast Editor Eric J. Savitz. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. 
