The annual meeting for shareholders of Sirius XM (SIRI) took place at 9:00 AM on Tuesday, May 22nd. While most annual meetings are pretty typical without a lot of news, there was perhaps a chance that drama surrounding Liberty Media (LMCA) just might unfold. As it turns out questions regarding Liberty Media and its 46.2% stake in the company were brought up, but no real answers were able to be given.
Perhaps the biggest news out of the meeting was the potential that Sirius XM may actually consider a new Nasdaq ticker symbol. It was stated that the company is giving consideration abandoning the now familiar SIRI symbol in favor of the symbol SXM. That's the big news? Well, essentially it is.
The meat and potatoes of the meeting were about current guidance, revenue growth, subscriber growth and the various situations that involve Liberty Media.
Essentially the company has maintained their current guidance with a hint that perhaps the subscriber guidance that was initially at 1.3 million earlier this year and raised to 1.5 million earlier this month just might still be a bit conservative. This is great news considering that subscribers are the bread and butter for Sirius XM.
Another possibility if you read between the lines is that there is a chance 2012 may be the swan song for Mel Karmazin as CEO of the company. When asked if he would be second in command in the event of a Liberty Media takeover, Karmazin expressed that he enjoys working for a board rather than for someone else. Now before investors get into a dander consider this. In the event of a Reverse Morris trust, the existence of a major shareholder will disappear, and the company will once again be "owned" by smaller shareholders and run by a board. Essentially, Karmazin could remain at the helm in this situation, leaving the only real speculation as to whether or not he simply wants to retire.
The bottom line expressed by Karmazin was that the satellite radio story, regardless of whether Liberty controls the company or there is someone else at the helm, will continue on the current trajectory. Revenue will grow by double digits for the next few years, as will subscribers, Free Cash Flow, and EBITDA. The long term story, at least at this point, remains intact and should benefit shareholders in the years to come.
The subject of a share buyback is now pretty much tabled (it was actually tabled at this time last year but many did not believe it). Because Sirius XM buying back shares would increase the Liberty stake, the company will not do it. I can not put it any more plainly.
Investors do have some good things to look forward to, but all of this is being overshadowed by the control issue with liberty Media. Until that issue gains resolution, we will see this equity play to the swings of news, the economy, and even the weather.
Additional disclosure: I have no position in LMCA.