File this in the category of “headache gone”. SiriusXM has agreed to settle an action by several Attorney General’s to refund about $3.8 million dollars to consumers who’s service was automatically renewed but undesired. As part of the settlement, Sirius XM has also agreed to make several changes to its business, including improving its cancellation process and sending notices before automatic renewals. Sirius XM said Friday in a statement that these changes have already been made. Customers who may have been unfairly charged between July 28, 2008, and Dec. 4, 2014, can apply for a refund from their state’s attorney general office or from SiriusXM.
From an investment perspective, the news carried a slight impact on stock price upon announcement. However, I expect that the fundamental business has not been impacted, and the size of the settlement quite small. further, if the customer service perception improves, it can only be considered as a good thing. This action will solve one legal headache that has been hovering over the company. On Monday, the equity should return to more normal ranges, and perhaps even begin to build upon a solid foundation in the mid $3’s.