All Share Buybacks At SiriusXM On Hold
This move is prudent in that any share buybacks that are from the open market would only serve to increase the Liberty stake even further, while at the same time decreasing the numbers in the minority. With an offer on the table that requires a majority of the minority to approve, anything that might impact that needs to be on hold. That is the exact reason that I speculated this move
“During this process, on the advice of legal counsel, capital returns are on hold. But from the perspective of our management team, it’s business as usual at SiriusXM. We will not let the Liberty transaction turn our head in any way away from the focus of running this business the best possible way to grow subscribers and free cash flow.”
SiriusXM had about $1.5 billion committed to share buybacks and another $340 million tied to buying back Liberty shares of SIRI. That is a pace of about more $100 million per month dedicated to share buybacks. These buybacks not only lower the float, but can help keep the volatility of the equity down. Without these buybacks happening, the support they did offer is now gone. I am not saying that this will cause the bottom to fall out on the equity, but it certainly will not be there to help bolster share price.
In many ways, some sort of deal with Liberty is inevitable. As more time passes, the leverage in this situation may well shift more and more to Liberty. Stay Tuned!
I think $3.46 is the bottom, buying at these levels is a steel
I would argue that the more time that passes until a deal is struck favors sirius shareholders, not Liberty. Think about it, Liberty needs Sirius.
Green….
Liberty already has Sirius. Yes, they want Sirius to fall under their umbrella, but it is not like Liberty is cash poor. Liberty can afford to be patient. I doubt that the minority shareholders will want to be as patient as Liberty can be.
A deal will be done, and the less savvy investors will think it is “bad” because they will fail to see the real picture and the bigger picture.
Only time will tell Spencer ! If you remember I told you that this will take several months to settle, and you replied no it would be within a month, well it has been a month already and I bet you anything that Liberty wont get it for less than $4 per share. Long term shareholders have all the time in the world, most of those investors that panic are already out! Majority of the minority have to somewhat satisfy most investors
Tom,
I said it could take a month to close out once a deal is struck. There is no way that it would take a month from when a proposal is made and not yet responded to.
The negotiations can take a while. The closing can happen quickly. It is simply a matter of conducting the votes.
If the market wasn’t going thru a correction, we’d be higher. SIRI had a great earnings call.the 1cent miss for anyone willing to take more than a cursory look was because of a one off deal. Cash flow is killer and subs are doing great. If it weren’t for the correction coupled with the uncertainty of the Liberty deal trust me….we’d be MUCH higher.