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Liberty SiriusXM Stock Higher After Berkshire Buys 5.3M Shares

Berkshire’s stake in Liberty SiriusXM totals 20.2 million shares. The stock is higher on Thursday.
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Liberty SiriusXM  (LSXMA) - Get Liberty Media Corp. Series A Liberty SiriusXM Report shares rose Thursday after a report said Warren Buffett’s Berkshire Hathaway  (BRK.B) - Get Berkshire Hathaway Inc. Class B Report bought 5.3 million shares of the tracking stock on Monday.

Berkshire’s purchase of the tracking stock for Liberty’s stake in Sirius XM Holdings  (SIRI) - Get Sirius XM Holdings, Inc. Report came at an average price of $50.02 per share, putting the total buy at about $267 million, Barron’s reported.

Berkshire’s stake now totals 20.2 million shares, or $1.08 billion at the recent share price of $53.25. That price is up 3% from Wednesday. The stock has climbed 9% since Oct. 27.

Liberty SiriusXM is part of John Malone’s Liberty Media, which reported earnings on Thursday. Sirius XM Holdings includes Sirius satellite radio and Pandora streaming service.

Liberty Media said in its earnings news release that it “effected tax-free exchange of 5.3 million LSXMA shares for 43.7 million SIRI shares [on Wednesday], taking Liberty Media’s ownership in SiriusXM to approximately 80.2%.”

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The rise above 80% means that all future distributions to Liberty SiriusXM Group from SiriusXM will be tax-free, according to Barron’s. Last month, Sirius boosted its quarterly dividend 50%, to 2.2 cents a share.

Sirius XM Holdings recently traded at $6.42, down 0.8%. Morningstar analyst Neil Macker puts fair value at $7.50.

“Sirius XM reported a strong third quarter, as revenue and Ebitda exceeded FactSet consensus expectations,” he wrote last week.

“The SiriusXM service added 616,000 self-pay customers in the quarter, the highest in the firm’s history. The remarkable quarter took the total over the past 12 months to a very impressive 1,504,000.…

“We think the current share price offers an attractive entry point for new investors.”