Sirius XM Holdings (SIRI) witnessed a notable surge of up to 12% in its stock on Wednesday following the revelation that Warren Buffett’s Berkshire Hathaway (BRK-A, BRK-B) has initiated a new stake in the satellite and online radio company.
As per Berkshire’s 13F report, which provides insights into its holdings, the conglomerate purchased nearly 9.7 million shares with a market value of about $43.8 million during the September quarter.
Despite Sirius XM facing challenges this year, with a 10% decline compared to the S&P 500’s 17% gain, the move by Berkshire signals confidence in the company’s potential.
In its fiscal third quarter results, Sirius reported a beat on earnings but missed revenue expectations. The total revenue showed a marginal decline of 0.4% compared to the year-ago period, primarily attributed to a 0.3% dip in subscriber revenue. Notably, advertising revenue bucked industry trends, increasing by 0.7% year over year to $460 million amid a shaky macroeconomic environment.
September brought news of a potential transaction proposed by Liberty Media, aiming to merge Liberty SiriusXM Group (LSXM) with SiriusXM to create a consolidated public company. Jennifer Witz, CEO and president of SiriusXM, confirmed that an independent committee is reviewing the proposal, emphasizing the company’s commitment to reaching long-term leverage targets.
Warren Buffett’s recent moves included selling off holdings in various companies like General Motors (GM), Johnson & Johnson (JNJ), Procter and Gamble (PG), Mondelez (MZ), Celanese (CE), UPS (UPS), and Activision Blizzard. He also trimmed positions in Amazon (AMZN) and Chevron (CVX).
In addition to Sirius XM, Buffett made a notable investment in the publicly traded holding company that owns the Atlanta Braves Major League Baseball club and The Battery Atlanta. The purchase comprised 223.6 million shares valued at nearly $8 million.
Buffett’s long-standing involvement in media and entertainment businesses dates back to Berkshire Hathaway’s acquisition of an 18% stake in the conglomerate resulting from the merger of ABC and Capital Cities Communications. Over the years, Buffett has expressed a favorable view of media companies, emphasizing their bright future and serving as a key player in significant corporate takeovers.
Despite the evolving landscape of the media industry, Buffett’s historical connection with newspapers, including owning The Washington Post, reflects his lifelong affinity for the print media business.
