2024-04-17 09:00:00 ET
Summary
- Sirius XM Holdings faces competition from various streaming services, which poses a risk to its relevance in the industry.
- The economy and rising costs of business also pose a risk to SIRI's profitability and margins.
- The merger between LSXMA and SIRI to create a new public company could make SIRI more interesting and potentially a takeover target.
Some may be surprised that Sirius XM Holdings ( SIRI ) is still relevant during the streaming age, but I am surprised how they have held their ground. I remember when satellite radio was the next big thing for automobiles and boats, but that was just over 2 decades ago. Since then, fierce competition has come into play, and consumers have countless options for audio content. From audiobooks to music and everything in-between there is an app and a service, and SIRI has been living in that in-between category as it's built a 360 degree service that offers music, sporting events and talk shows, news coverage, podcasts, original shows, and more. Over the past decade, shares of SIRI haven't done much as they more than doubled from 2014 into 2018, traded sideways for a bit, then plummeted, returning 4.95% prior to factoring the dividend. SIRI has had a fragmented ownership structure, and the shareholders of SIRI directly only own 16% of the company, while Liberty Media Corporation ( LSXMA ) owns 84%. Late last year LSXMA and SIRI announced a transaction where a combination of both entities would occur to create a new public company and simplify the ownership structure through one series of shares. I am not expecting much in the short term, but after the deal closes, SIRI could become much more interesting, and it's currently on my radar. I think you will be surprised at how profitable SIRI is, and there could be an opportunity on the horizon....
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