Already, analysts deserve a pat on the back
for sticking with
their fundamental expectations for the company, and in particular, its relationship with large minority shareholder
When SiriusXM shares fell below $2 earlier in 2012, analysts highlighted changes in the company's relationship with Liberty Media and a recovery in its earnings, balance sheet and cash flow as reasons to stick with the stock.
Three years after Liberty Media caught the market bottom with a 40% stake in SiriusXM, investors and analysts entered 2012 with the prospect that the easy money had been made on the company. New analysis indicates there's still reason to remain optimistic.
Liberty Media gained its SiriusXM stake as a result of a $530 million loan it provided the satellite radio company in 2009. A standstill agreement that prevented Liberty Media from increasing its SiriusXM stake for three years expired in early 2012. In March, a petition with the
Federal Communications Commission
paved the way for Liberty Media to build its stake in SiriusXM towards control, which it's done in recent stock purchases.
Overall, the company has 3.83 billion shares, meaning that its Thursday afternoon share price of $2.90 still gives SiriusXM a market cap of over $11 billion. Wat
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-- Written by Antoine Gara in New York