stopwatch.jpgThe merger between Sirius and XM satellite Radio did not get approved in 2007 as the companies and many investors had hoped. We are now in 2008, and the question that is likely at the forefront of the minds of sector watchers is when will a decision come. While that question is important, there is perhaps a more critical issue to consider. Now that the theoretical timeline of merger approval has come and gone, how will the street react with the new year.

Throughout the last couple of months there have been a few false starts on the merger, and anticipation ran high. Now that the letdown has happened, will the street embrace these equities, or will investors move their dollars to other equity pastures? The immediate tone will be known in the first part of January, as both Sirius and XM are close to breaking key support levels. If they break these levels, is a stock freefall possible, or will they bounce and hover as the street awaits a decision?

Many analysts believe that there is above a 50% chance of approval, but the waiting game has become more expensive as time passes, and other investments are delivering pay days that simply are not happening in SDARS. The patience of the SDARS investor is indeed being tested.

The merger was announced 315 days ago.

The FCC Comment Period has come and passed.

The FCC time clock has run past the 180 day goal.

The DOJ has had their second request information since September 5th.

Sirius and XM complied with the FCC Information request

The Shareholders approved the merger

All of these developments have happened, and as each step has progressed, investors were trying to position themselves for a merger decision. Some believe the merger will pass, and others that it will fail. To date, the uncertainty has favored those betting against the merger, but throughout the process, there have been some substantial pushes that have shown there is a lot of investment money sitting on the sidelines waiting for the decision, a hint, and a clue as to which way the merger wind is blowing.

CES is coming, fourth quarter conference calls and subscriber announcements are due, but the street is waiting on one thing. The merger news. It seems that nothing will move this stock in a substantial way until the merger decision is reached.

Most still believe that the DOJ will take the lead in the merger, with the FCC announcing their decision afterwards. The merger agreement between Sirius and XM expires in a couple of months. Whether or not these companies extend the agreement is yet to be determined, but one could reasonably assume that having come this far, they will see the issue through. Especially considering the results of the respective shareholder votes.

Speculation for regulatory decisions seems to have run its course, and now it is simply a waiting game. The regulators have their information. They have the public comments, they have the perspective of proponents and opponents on the merger, and they have had plenty of time to review all of the information. All eyes now rest on the DOJ and FCC. How long the respective agencies take to come to a decision is anyone's guess at this point. The question is how the equities will be impacted as we wait.

Position - Long Sirius, Long XM