17 hours ago
'No Longer Worth the Investment': SiriusXM Stock (NASDAQ:SIRI) Surges as a Post-Stern Future Considered
New developments in the Howard Stern / SiriusXM (SIRI) saga have emerged, and there are signs that the streaming radio giant may be getting ready for a future without Howard Stern. New reports say that Sirius is making offers, but not at a price Howard would take. Despite this, investors seem oddly happy about a Stern-free future for Sirius, sending shares shooting up nearly 5% in Wednesday morning's trading.
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The latest reports around the negotiations between the two camps suggest that SiriusXM is looking to roll out the red carpet for the 'King of All Media,' but in a direction heading away from SiriusXM. SiriusXM is planning to make an offer to keep Stern in the fold, but it will be a far, far smaller offer than previously seen, and one that Stern is not likely to accept.
An 'unnamed source' noted, 'Sirius and Stern are never going to meet on the money he is going to want. It's no longer worth the investment.' While SiriusXM once drew plenty of investors looking for growth, these days, it tends to pull in more investors looking for long-term value. A combination of low valuation and decent quarterly dividends has made it attractive, and solid cash flow makes the dividends likely to stick. That is especially true if it can keep expenses low by not paying ridiculous fees to a handful of celebrities.
Beating the Lawsuits
But SiriusXM is coming off a bigger win that just saved it around $150 million, when SoundExchange accused Sirius of failing to pay royalties on music. Word from the US District Court for the Southern District of New York said that SoundExchange was not '…authorized to bring the royalty lawsuit under federal copyright law.'
This might sound odd, given that SoundExchange is the '…recording industry's congressionally-designated collective rights organization.' But according to Judge Naomi Reice Buchwald, SoundExchange, seemingly by design, does not have litigation authority in its arsenal. Therefore, the suit pretty much fell flat on filing.
Is SiriusXM Stock a Good Buy?
Turning to Wall Street, analysts have a Hold consensus rating on SIRI stock based on three Buys, three Holds, and five Sells assigned in the past three months, as indicated by the graphic below. After a 27.7% loss in its share price over the past year, the average SIRI price target of $22.64 per share implies 2.82% upside potential.
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