Why SiriusXM Was Down On Massive Volume
Even though the Liberty Media deal is now off of the table, there are forces still at work dealing with the shift. SiriusXM was down into the $3.20’s today on big volume of over 135 million shares. While some retail investors had no love for a deal with Liberty, the bigger players did seem to really want it. Do not say I did not share that sentiment with you. I did. Essentially, this deal is off of the table, but the street knows that there will one day be a deal. In the mean time, they will jockey positions. One glimmer of hope is that SiriusXM is well oversold, and well below typical valuations. You and I know this, but the street is still in adjustment mode.
Liberty dealings still have meaning to SiriusXM. Yes, even though the SiriusXM is off of the table, many savvy investors that play satellite invest into Liberty. With Liberty now getting ready to do some restructuring, the play over on that side of the yard is now getting interesting. It could be worth a shift. It certainly was with the Starz spin! A purer Cable play at Liberty is now in the cards, with some added benefit of “bonus shares”.
From a technical standpoint SiriusXM is UGLY. We could have a decent opportunity here if you are savvy. As stated earlier, the equity is oversold, and valuations are low. They first key to identifying the bottom is with the volume. We need to see volume on downward pressure dry up. It is almost that simple. The risk below is likely about $3.19, but that should not even last long. In my opinion we are near the bottom. We simply lack confirmation.
Volume
Support and Resistance
Exponential Moving Averages
this is a joke. 3.09???
we are actually gonna break 3 bucks arnt we
were is the company management on this? Where is some level of support from the buy back? Are they even buying back?
The company is taking the Mel Karmazin approach to clarity for share holders. I guess we are back to the days where SiriusXM will have to bump along the bottom without leadership. My biggest fear is they are not buying back right now.
Jeff,
As stated in my earlier response, the shares that are being bought back now are Liberty shares at $3.65 per share…$340 million worth. I do not think they are buying outside of that right now.
I understand they are cash tight right now thanks to Liberty buyback. Just saying some financial creative maneuvering to buy back on open market soon would be nice.
W….
It will certainly be tough to see it, but dipping into the $2’s is a possibility, though I do not think it will stay there long.
Right now the next buy back is about $340 million to Liberty in April (at a pre-negotiated$3.65 per share!). The company does not really have the cash on hand to be buying back from the open market in my opinion. They would have to tap into credit to buy back on the open market.
why wouldn’t they tap into the credit line? Thats what its there for. IS there any other reason why the 360 million shares are the only shares they can purchase? It seems like its a dereliction of duty to not be buying at what is damn close to a 52 week low
w….
The company needs to maintain a certain amount of liquidity. They have $840 million available on the credit line.
At the end of December they had $135 million in cash and cash equivilants. They have $340 million due to Liberty. That already could have them tapping into the credit line to pay Liberty.
If they bring in $250 million in cash, and have $135 million already existing, that would total $385 million.
Pay Liberty and we are at just $45 million plus $800 million in credit.
They are pretty cash tight at the moment.