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Mill Tabak analyst David Joyce sees a buying opportunity due to the confusion of Wednesday's trading, and rumors that sent both Sirius (NASDAQ:SIRI) and XM (XMSR) down sharply.

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XM Satellite Radio (XMSR-$13.21-Buy)
December 13, 2007
David C. Joyce, CFA
Miller Tabak + Co., LLC

Upgrading XM Satellite Radio to Buy from Neutral on Regulatory Review ‘Confusion’ Sell-Off; Reiterate $17 Target for XMSR, Sirius Satellite Neutral and $3.50 Target

We are upgrading XM Satellite Radio (XMSR-$13.21-Buy-Target $17) to Buy from Neutral and keeping our $17 price target, as both XMSR and its merger partner Sirius Satellite Radio (SIRI - $3.29 – Neutral – Target $3.50) fell in large-volume, late-day regulatory review ‘confusion’ that led deal arbitrageurs to unwind their positions, thereby widening the XMSR exchange ratio gap to parity from about 8.8% at the beginning of the day to 14.6% currently.

There is 29% potential upside to our $17 target for XMSR, and 14.6% potential upside to the current SIRI trading-level-driven 4.6:1 exchange ratio parity level of $15.13.

Source: XM Satellite Radio: Miller Tabak Sees Buying Opportunity