Warren Buffett takes the floor and meets with Berkshire Hathaway shareholders before their annual meeting on May 3, 2024 in Omaha, Nebraska.
David A Grogan
Warren Buffett Berkshire Hathaway has further increased its share SiriusXMwho now owns 32% of the New York-based satellite radio company.
The Omaha, Nebraska-based conglomerate bought about 3.6 million shares for about $87 million in separate transactions Wednesday through Friday, according to a filing late Friday with the Securities and Exchange Commission.
Berkshire increased its bet after billionaire John Malone's Liberty Media completed its deal to combine its tracking shares with the rest of the audio entertainment company in early September. It was part of Malone's restructuring of his sprawling media empire, which also included a spinoff of the Atlanta Braves baseball team into a separate, publicly traded company in which Berkshire also has a stake.
Buffett's company first bought Liberty Media's trackers in 2016 and began investing in SiriusXM's tracking shares in early 2024, after the deal was announced in a likely merger arbitrage play.
The 94-year-old has never publicly mentioned the bet and it is unclear whether he was behind it or whether it was the work of the billionaire's investment lieutenants, either 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. According to FactSet, of the 14 analysts who studied the name, only five gave it a buy rating.
JPMorgan analyst Sebastiano Petti last week resumed coverage of SiriusXM with an underweight rating, citing concerns about the radio giant's long-term growth and its ability to successfully appeal to a broader demographic.
Meanwhile, the Liberty transaction, which reduced its share count by 12%, could cause the company to suspend its share buybacks until 2027, which will likely weigh on shares, the analyst said.
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SiriusXM
The stock rose 8% on Monday on Berkshire's disclosure. 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 acquired a non-voting stake in it Paramount Global's Class B shares. The investment quickly went wrong. Buffett announced in May of this year that he had sold the entire stock at a huge loss.
Buffett said the unsuccessful Paramount bet made him think more deeply about what people prioritize in their free time. He previously said that there were too many players in the streaming industry seeking viewer dollars, leading to a fierce price war.