Those that follow the satellite radio equities closely noticed some wild trading today. Both Sirius and XM dropped like rocks in less than a minute on what appeared to be no news. Then we all saw what happened. FCC commissioner Copps voted against the merger. But why did that cause a drop? Most were expecting Copps to vote against the merger anyway?
The answer could be a simple as the headline attached to the Copps story.
"FCC Member Votes Against XM-Sirius Deal"
Given all of the recent talk about commissioners Tate and Adelstein, it was only natural that people were expecting their votes first. More specifically, people anticipated that the next vote to be publicized would belong to Tate, and that the companies were waiting on "real" negotiations with Adelstein in hopes that Tate would come through with the last YES vote needed. The headline offered no indication of which commissioner voted, and perhaps some assumed that Tate came out against the deal. Had this been the case, it would have been devastating for the equities, leaving all hopes of a merger in the hands of Copps and Adelstein.
The street quickly sorted out that it was Copps that fired his gun while Tate is still exercising her right to remain silent. The equities rebounded, and now once again, we all "Wait on Tate".
Things seem to be moving fast and furious, so keep your eyes peeled for SDARS merger news.
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Position: Long Sirius, XM.