SiriusXM Announces Additional $2 Billion In Stock Buyback
SiriusXM, the company that has already bought back billions of dollars of its own stock, announced that its Board of Directors has approved an additional $2 billion of common stock repurchases. The SiriusXM mantra of returning value to shareholders in the form of buying its own stock will continue into the foreseeable future. Shares of common stock may be purchased from time to time on the open market and in privately negotiated transactions, including in accelerated stock repurchase transactions and transactions with Liberty Media and its affiliates. The Company will fund the repurchases through cash on hand, future cash flow from operations and future borrowings
Since 2012 the stock repurchase program (inclusive of this latest announcement) will be an impressive $8 billion. This program is now getting to the point where these share buybacks are becoming more and more meaningful to shareholders. Essentially, the supply of stock was once massive. Limiting that supply can be a big boost to driving shareholder value. Over the past couple of years the program has been great at creating price stability and a good foundation to support the stock.
Liberty Media and its affiliates control about 60% of the SiriusXM shares. If Liberty does not sell any stock, the percentage of Liberty ownership will increase. There is potential, in the months ahead, that Liberty renews a possible effort to buy out remaining stock. This could prove lucrative for shareholders that play SiriusXM and Liberty stock.
The bottom line is that there is now another $2 billion committed to support the stock. This is a luxury that many companies do not have. Essentially SiriusXM feels that the stock is undervalued, and buying its own stock is a good method to help correct that situation. Stay Tuned!
“Stay tuned”
We will. How much more money do you think they will add to the buybacks? I believe they may spend about $12B total ($4B more) in the next three years. The objective could be to get close to 4B shares.
when charter and time warner are said and done i think liberty comes back for the remaining 40%. Most of which now is in the hands of institutional investors who can see the larger picture as opposed to emotional retailers who are all ” i am not giving them away for free”
I agree with you in principle. It may be beneficial for all.
The only “minor” detail left out is “what they are going to offer”. As you can recall, their first offer was a joke and was responded to accordingly. I am afraid that their next offer, if ever made, may be a similar joke.
Do you think the response will be different?
i dont agree it was a joke. Yes it was low but the liberty shares were fairly undervalued at the time as well so they would have likely gone up. Here is my two cents. I think the share swap which is in effect a reverse split and then the continued re purchase of shares which are now LMCK shares rather then SIRI shares will see better results for share holders. There would be less total outstanding shares and Liberty is not nearly susceptible to manipulation and trading that siri is
Matt,
I assume you are talking about lmca shares. Again, I agree with and would be interested in a share swap. However, the devil is always in the details.
Let us not forget that lmca today is 90% Sirius XM. Its share will suck as long as siri’s shares are down. The value of siri is huge. Why should I lose money as the result of the swap vs. making money? If they offer a 25% premium I would be very supportive.
Let us look at this from a different angle. Let us assume that apple or google approached liberty about siri sale. What do you think liberty would be asking?!!! If this happened today the price could be double. Maffei even mentioned $10 pre share that would be attractive for liberty to participate in the buybacks. What makes liberty so different from any other buyer that it should get siri for a song? Crazy, isn’t it???
ok but apple or google wont be buying it. U know that and i know that. If they wanted it they would have gone for it by now. LMCK shares are what were going to be issued to sirius shareholders the LMCA only went to liberty shareholders. I think both shares are undervalued because Sirius seems to be under constant attack. Consolidate into LMCK shares and and they can better defend the share price and have a more effective buyback. I think siri has gone as far as it can on its own and its time for it to be absorbed and more value unleashed
My gut keeps telling me that in principle you are right. Still, if I have 5M in siri why should I end up with $4.5M in lmck/lmca???
From the point of its business growth siri needs liberty as much as I need a flight to the Venus. We are talking only about “perception”. Sirius XM is an extremely strong business with an extremely strong future. Look at its fcf and sub growth in Q2. Do you thing Q3 is going to be worse. Sirius XM does not need as life line. From the point of business, Sirius does not need liberty media. Period!!! Pay me a premium and I will agree. Otherwise all my shares, and I have quite a few, will vote “no”.
Sooner or later siri will break the market. Q2 was 692K net subs. If Qs 3 & 4 are in the same ballpark or better siri should break through. 30M net subs IS a big number. In three years there may be close to 40M, in another three about 50M. We are talking large numbers and it will be impossible to hold back the share price. I estimate if the market remains so dumb for another two years siri may very well buy back about 1.2B shares and reduce the share count to 4B and change.
To conclude, I do not see a scenario where siri will not fare well, with or without liberty! Period!!! All we need is to stay patient.
i agree its doing just fine but perception can be reality. THe perception is that its in a rut and doing nothing sharewise. I think u get your extra 500k back on liberty value before you know it. Thats all.
let see what happens in the next few months but my gut tells me once the cable deal is put to bed they swing back in this direction
Where I disagree is that sirius is doing “just fine”. They are doing much better than “just fine”.
Most likely you are correct that I will get my .5M once I am inside. We shall see.
If Q3 is as strong as I expect (auto sales in August are about 1.57M)and siri re-guides its 2015 results the stock may move. In short, I will resist any offer that is under $4.50. I will vote no although institutional investors may support $4.20+.
i have been in since under a quarter and will take anything above 3.80 at this point cause i believe it will preform better from a pps standpoint not necessarily that management is not doing something right
so are we to assume this site is finally dead? Good quarter and finally breaks out above 4 bucks and nothing….
and i have answered my own question