Warren Buffett will speak and meet with Berkshire Hathaway shareholders ahead of their annual meeting in Omaha, Nebraska on May 3, 2024.
David A. Grogan
Warren Buffetts Berkshire Hathaway continued to increase its importance SiriusXMnow owns 32% of the New York-based satellite radio company.
The Omaha, Nebraska-based conglomerate bought roughly 3.6 million shares for about $87 million in separate transactions from Wednesday through Friday. filed with the Securities and Exchange Commission late Friday.
Berkshire increased its bet after billionaire John Malone’s Liberty Media completed the deal early September to combine its tracking shares with the rest of the audio entertainment company. It was part of malone’s reshuffling of his sprawling media empire, which also included a split off of the Atlanta Braves baseball team into a separate, publicly traded company, in which Berkshire also owns shares.
Buffett’s company first bought Liberty Media’s trackers in 2016 and began piling into SiriusXM’s tracking stock in early 2024 after announcing the deal in a likely merger arbitrage play.
The 94-year-old has never publicly mentioned the bet, and it is unclear whether he is behind it or if it is the work of the billionaire’s investing lieutenants, Ted Weschler or Todd Combs.
Not very popular
SiriusXM, which is struggling with subscriber losses and unfavorable demographic shifts, is not a popular stock on Wall Street. Of the fourteen analysts who studied the name, only five gave a buy rating, according to FactSet.
JPMorgan analyst Sebastiano Petti last week reopened coverage of SiriusXM with an underweight rating, citing concerns about the radio giant’s long-term growth and its ability to successfully target a broader audience.
Meanwhile, the Liberty transaction, which reduced its share count by 12%, could result in the company pausing share buybacks until 2027, which will likely weigh on the stock, the analyst said.
SiriusXM
The stock fell 8% on Monday after Berkshire’s announcement. However, shares are still down more than 50% this year.
The last time Berkshire made a significant investment in a major media company was in 2022, when the conglomerate bought a non-voting stake in Big global‘s Class B shares. The investment deteriorated quickly. Buffett revealed in May this year that he had exited the entire stock at a big loss.
Buffett said the unfruitful bet on Paramount made him think more deeply about what people prioritize in their spare time. He previously said the streaming industry has too many players looking for viewer dollars, causing a fierce price war.