SiriusXM Settles Down
Yes, we had volume of 152 million shares, but in the end SiriusXM closed down to $3,77. In contrast, Liberty traded down to $139.54. In essence, the current swap ratio now sits at $3.53, well off of the pace that was announced to shareholders. If shareholders were angry with the offer before, they certainly are more angry today. That being said, the equity, on massive volume since the announcement, has not been able to step up above critical resistance points.
SiriusXM has settled down. It currently trades 24 cents above the Liberty offer. If you are a SiriusXM investor, the biggest thing you can route for is for Liberty media stock to appreciate.
If you look at the volume you will notice that it is now stepping down. We have gone from 400 million to 193 million to 152 million. This is a big indicator that interest (yes it is still high) is wearing off. With SiriusXM pre-announcing subs and guidance, there is not really any thunder left in the news front. Bear that in mind as you formulate what you think a reasonable offer from Liberty is.
The support and resistance carries a wall at $3.83. It is imperative for SiriusXM to get above this level if there is any real hope in seeing a Liberty offer of about $4. If the equity stays below this level, it hampers the negotiating power of the “independent” directors.
The EMA’s remain essentially the same. We still have two warning flags.
Volume
Support and Resistance
Exponential Moving Averages
“there is not really any thunder left in the news front”
I do agree that there is on thunder from a negative stand point. The dreaded Q4 #s are essentially out. This was a HUGE concern of yours and rightfully so because of the negative affect of the GM switch. This is no longer a concern as the news is out and is currently being absorbed. So, I feel that now that this is behind us it actually puts the risk to the upside for those out of the stock with the Liberty deal on the horizon and telematics clarity during the Q4 cc.
The Q4 #s were taken positive to neutral at worst. This is very positive going forward.
Denco…
I would say that some Q4 news is out, but only savvy investors are aware that the sub number was actually negative. The company did a good job of “hiding” the negative subs. We will still have to deal with the quarterly call, where it will become clear that subs were negative. Remember, most investors do not follow closely.
The company said they expect to meet other guidance, so that is good, but that sub number will still be a bit scary when people actually realize that we lost subs.
It will get interesting!