Sirius XM (SIRI) received heavy attention during the week, as one analyst said he believes it is a matter of time before the company is acquired.
Citigroup analyst Jason Bazinet says Liberty Media (LMCA ) may potentially double its Sirius stake to 80%. Bazinet believes this could create an additional $930 million in value by tapping into Sirius' significant tax assets. Bazinet has a buy rating on Sirius with a $2.50 price target and a neutral rating on Liberty Media with a $94 target.
Bazinet said that Liberty Media has access to $6.5 billion in liquidity from three sources: "1) $3.85 billion from Liberty Media cash on hand, existing Sirius debt, existing lines of credit and FCF in 2012; 2) $1.4 billion from Sirius cash on hand and FCF in 2012; and 3) $1.25 billion in cash from Liberty Ventures." Purchasing an 80% stake of Sirius at $2.50 per share would cost $6.36 billion, so Liberty Media has the means to do it.Sirius shares closed the week up 5%, or 11 cents, at $2.31, while shares of Liberty Media gained 1.56%, or $1.38, to close at $89.66.
Earnings from Priceline.com (PCLN) and Finisar (FNSR) caught investors attention, showcasing the strengths and weaknesses of the global economy. After the close of trading on Monday, Priceline.com reported earnings that handily beat Wall Street forecasts. The online travel company posted fourth-quarter earnings of $5.37 per share on $990.77 million in revenue. Wall Street analysts polled by Thomson Reuters expected priceline.com to earn $5.05 per share in the fourth-quarter on $967.9 million in revenue. Priceline.com also gave strong first-quarter guidance, saying it expects non-GAAP earnings to increase $37 million in the first quarter of 2012. Shares of priceline.com ended the week up 9.39%, or $55.45, to close at $645.86.
Finisar shares fell during the week after the optical networking company reported a below-consensus quarterly profit and providing a weaker-than-expected outlook. Sunnyvale, Calif.-based Finisar reported third-quarter non-GAAP earnings of 23 cents per share on $243 million in revenue. Wall Street analysts polled by Thomson Reuters were looking for earnings of 22 cents a share on revenue of $245 million. The company also forecast earnings of 18 to 22 cents a share for its fiscal fourth quarter on revenue ranging from $235 million to $250 million. The average analyst estimate is for a profit of 25 cents a share in the quarter on revenue of $253.5 million. The stock closed the week down 13.5% or $3.07, at $19.69.
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