What Happened to the Sirius XM (SIRI) Merger?...
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...because it seems like the market forgot.
Since The Wall Street Journal reported on July 23 that the majority of FCC commissioners had reached a deal to approve the merger (at which time the stock rallied 12%), shares of Sirius XM Radio (Nasdaq: SIRI) have lost more than 70% of their value, falling from $2.68 on July 23 to under $0.74 today.
Contrary to what many investors had probably anticipated, Sirius XM stock sold-off sharply for the next four trading sessions after the initial approval announcement was made. The stock traded relatively flat following this decline, ranging from as high as $1.60 to as low as $1.26 over the next month. Then, on September 9, Sirius XM issued FY08 and FY09 subscribers guidance that was below the Street estimates. Despite reassuring comments by CEO, Mel Karmazin, and an increase in its net synergies estimate to $425 million in '09, Sirius XM stock sold off nearly 10% on that day. The next day, shares continued selling-off and moved under the $1.00 psychological level, a level which has still not been taken back four trading sessions later.
So what is the market trying to tell us about the future of satellite radio? With shares of Sirius XM down about 41% in the last six trading sessions, investors could be predicting that nearly 2 years of rumors and FCC bargaining could be for nothing. At the same time, when will value investors finally head into this stock and consider it oversold? I'm sure we'll all stay tuned as this baffling story continues to unfold...
Sirius XM Radio, Inc. provides satellite radio services in the United States.
Since The Wall Street Journal reported on July 23 that the majority of FCC commissioners had reached a deal to approve the merger (at which time the stock rallied 12%), shares of Sirius XM Radio (Nasdaq: SIRI) have lost more than 70% of their value, falling from $2.68 on July 23 to under $0.74 today.
Contrary to what many investors had probably anticipated, Sirius XM stock sold-off sharply for the next four trading sessions after the initial approval announcement was made. The stock traded relatively flat following this decline, ranging from as high as $1.60 to as low as $1.26 over the next month. Then, on September 9, Sirius XM issued FY08 and FY09 subscribers guidance that was below the Street estimates. Despite reassuring comments by CEO, Mel Karmazin, and an increase in its net synergies estimate to $425 million in '09, Sirius XM stock sold off nearly 10% on that day. The next day, shares continued selling-off and moved under the $1.00 psychological level, a level which has still not been taken back four trading sessions later.
So what is the market trying to tell us about the future of satellite radio? With shares of Sirius XM down about 41% in the last six trading sessions, investors could be predicting that nearly 2 years of rumors and FCC bargaining could be for nothing. At the same time, when will value investors finally head into this stock and consider it oversold? I'm sure we'll all stay tuned as this baffling story continues to unfold...
Sirius XM Radio, Inc. provides satellite radio services in the United States.
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