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Buffet is loading the truck

Buffet is loading the truck
Written by
Dawson Ignatieff
Dawson Ignatieff
Published on
April 30, 2024
Read time
3
 min read

Buffet just added a fuck ton more $LSXMK Liberty SiriusXM Group

Buffet will not stop buying $LSXMK, he has almost doubled his position since early March, and he has consistently been chipping away at this company. So why?

Well for starters, I don’t think Buffet’s 2006 caddy has airplay, he probably thinks Sirius Radio’s 150 ad-free channels are the best thing since sliced bread.

However, Liberty SiriusXM Group is in an ongoing merger with SiriusXM Satellite Radio and Pandora. SiriusXM offers a wide range of content including music, talk, news, and sports programming. SiriusXM and Pandora collectively reach a monthly audience of around 150 million listeners, providing a mix of live, on-demand, and curated audio content. Keep reading to see why this is merger is major reason why we think Buffet is loading up…

But first 👇

Fundamentals📝

$LSXMK doesn’t appear to be the sexiest stock on the block, I am no Warren Buffet but the financials don’t exactly scream buy.

Recently growth has significantly slowed down, with no dividends, debt is increasing, and net income decreasing. However over the 10 years, yes growth is significant.

However, analysts are giving it an average price target of $39, and have a 7/10 GF score and a fair price of $39.82 with a 32% Margin of Safety at its current prices.

So from a total boomer perspective yea, it’s a Value buy. But yunno? The fucking Radio? Is this a growing industry? The way the financials are looking no it’s not, and I am no genie but I am under the age of 80 and I can’t see myself hopping in my car in 10 years to enjoy some Sirius Radio.

Here is why we think Buffet Bought…

Warren Buffett's buying of SiriusXM is on par with his strategy of investing in companies with strong moats and high cash flow, despite high debt levels.

The ongoing merger aims to simplify the corporate structure and address the pricing disparity between SiriusXM and Liberty SiriusXM. This situation presents an arbitrage opportunity due to the 14% spread caused by accounting and market value differences.

However, engaging in arbitrage, especially short selling, carries the risk of a short squeeze, with over 20% float being shorted, which could potentially lead to a sharp increase in share prices due to the merger's all-stock transaction structure.

I don’t think Buffet is betting on a Radio comeback, I think he sees an arbitrage play…Although $LSXMK is expanding into new media fields and does own the booming Business of Formula 1, I think he is looking at this from a different angle. As I said above, I am not Warren Buffet and I don’t quite understand this enough to bet big on it. But hey, hey he doesn’t have a 340b portfolio from making bad calls.

That’s All Folks

Thank you for reading. Like usual. Not financial advice.

We own don’t own any stonks in $LSXMK. Full disclaimer here

Cheers,

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