I wish that I could report that there was some compelling news on the SiriusXM story, but alas... there is not. The equity sits right in the middle of the range I have outlined and remains there. Sometimes half of the battle is knowing that there does not appear to be much happening. The game now is not about stock movement, but rather developing strategies for the possibilities at hand.
If SiriusXM Rejects The Offer Without a Counter Proposal
I would view this as a neutral to bearish event from a street perspective. People are having troubles determining a value of SiriusXM as it relates to this offer. A rejection without a counter proposal will not help that assessment. It would also put the ball back into the Liberty court, thus creating the next "wait-and see" for the equity.
SiriusXM Rejects The Proposal With a Counter Proposal
In my opinion the street would view this as bullish. This would point to a possible premium that is above the Liberty offer. While the premium I am discussing may not be the lofty numbers some have come up with, it is a premium none-the-less. If you are hearing $6 or $5, you are hearing that from someone that does not understand the proposal on the table. In simple terms people looking for those types of numbers are looking to get upside premium twice...once up front, and a second time as the new equity appreciates. That thinking is naive by any reasonable standard in this situation. The premium I am referring to is giving SiriusXM shareholder .08 shares of the series c shares per SIRI share instead of instead of .076. The fact is, this deal has a pretty narrow window that makes financial sense. If you are thinking about %5 or $6 dollars, you are not out in left field, not in the parking lot, and not in the same city. You are alone in an ocean with a very very small minority of similar thinkers. Those people will be the ones sitting in a life boat with no oars.
SiriusXM Accepts The Proposal
This is not likely in my opinion. It would bring a small amount of validity to some of the ridiculous class action suits that are being proposed. If the proposal is accepted as is, the street will view this as having a bearish bias.
The technicals remain about the same, as do the things to watch for.
Support and Resistance
Exponential Moving Averages