{"id":85042,"date":"2023-11-15T20:35:13","date_gmt":"2023-11-16T01:35:13","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/sirius-xm-stock-pops-on-berkshire-hathaway-stake-it-probably-wasnt-warren-buffett\/"},"modified":"2023-11-15T20:35:14","modified_gmt":"2023-11-16T01:35:14","slug":"sirius-xm-stock-pops-on-berkshire-hathaway-stake-it-probably-wasnt-warren-buffett","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=85042","title":{"rendered":"Sirius XM Stock Pops on Berkshire Hathaway Stake. It Probably Wasn’t Warren Buffett."},"content":{"rendered":"
\n
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<\/p>\n<\/figure><\/div>\n

A small purchase of stock in
\n Sirius XM
\n by
\n Berkshire Hathaway
\n is going a long way, but CEO Warren Buffett likely wasn\u2019t the investor behind the purchase. <\/p>\n

Sirius XM Holdings stock (ticker: SIRI) jumped 9.1% to $5.34 Wednesday, after Berkshire (BRK\/B) disclosed Tuesday evening it had taken a very small stake in the satellite radio company. According to a quarterly 13-F filing, Berkshire bought 9.7 million shares of Sirius worth about $50 million in the third quarter, less than 1% of the company\u2019s market value of $20 billion. <\/p>\n

\n

That\u2019s a big stock move for what was a tiny purchase by Berkshire, which has an equity portfolio of about $350 billion. The jump might reflect, in part, a thin float in the shares, as 83% of Sirius\u2019s 3.8 billion shares are controlled by Liberty Media and held by one of Liberty\u2019s tracking stocks, Liberty SiriusXM Holdings (LSXMA).\u00a0<\/p>\n

Another possible factor behind the stock\u2019s sharp rise is many investors like to follow Buffett\u2019s moves\u2014except Sirius likely wasn\u2019t one of them.\u00a0<\/p>\n

The Sirius purchase probably was done by investment manager Ted Weschler, rather than Buffett himself. Weschler and his fellow manager, Todd Combs, run about 10% of the Berkshire portfolio and operate independently of Buffett, who runs the other 90%.<\/p>\n

Berkshire watchers believe that Weschler is the manager behind Berkshire\u2019s sizable stake of about 20% in the Liberty SiriusXM Holdings tracking stock.<\/p>\n

Weschler is believed to be close to Liberty Media CEO Greg Maffei and is thought to have orchestrated a swap of Sirius stock held by Berkshire for Liberty SiriusXM tracking shares in 2021.<\/p>\n

Berkshire didn\u2019t immediately respond to a request for comment.<\/p>\n

The new Sirius position would also be very small for a new holding by Buffett, who tends to like to make purchases of at least $3 billion for Berkshire.<\/p>\n

Another likely reason for Wednesday\u2019s rally is Sirius also has one of the highest short-interest ratios among Nasdaq 100 stocks, with about 171 million shares shorted, or nearly 30% of the public float. A short position is a bet that a stock price\u2019s will fall, by borrowing and then selling the shares. However, a rapid rise in a highly-shorted stock, such as Sirius, can trigger a so-called squeeze, when short sellers rush to buy back the stock to limit their losses. <\/p>\n

As a result, Sirius stock can be volatile and has been subject to short squeezes\u2014including one in the summer when the stock popped to about $8 from $5 in a matter of days before falling back.<\/p>\n

Based on what happened this summer, Sirius stock could decline soon.<\/p>\n

The jump in Sirius stock is inflicting financial pain on arbitragers and other investors who have piled into a popular trade in which they buy the Liberty Sirius XM tracking stock and sell short Sirius\u2014hoping to capitalize on a narrowing of the difference, or spread, between the stocks\u2019 prices. <\/p>\n

Liberty Media has proposed a transaction that would eliminate that spread: A distribution by Sirius of the underlying Sirius shares to the tracker holders to create a single stock for the satellite-radio company. That prospect has excited participants in this trade.<\/p>\n

The Sirius\/Liberty SiriusXM spread, however, has widened Wednesday, with Sirius effectively valued at 40% more than the Liberty tracking stock, Barron\u2019s<\/em> estimates, up from about 30% earlier this year. Liberty SiriusXM stock is up 3.1% to $26.60 Wednesday, trailing the gain in Sirius.<\/p>\n

The huge spread may make it tough for a special committee of Sirius directors to approve the Liberty-friendly combination of Sirius and the tracking stock that was proposed in September.<\/p>\n

Write to Andrew Bary at andrew.bary@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

A small purchase of stock in Sirius XM by Berkshire Hathaway is going a long way, but CEO Warren Buffett likely wasn\u2019t the investor behind the purchase. Sirius XM Holdings stock (ticker: SIRI) jumped 9.1% to $5.34 Wednesday, after Berkshire (BRK\/B) disclosed Tuesday evening it had taken a very small stake in the satellite radio […]<\/p>\n","protected":false},"author":1,"featured_media":85043,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-85042","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nSirius XM Stock Pops on Berkshire Hathaway Stake. 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