Seeking Alpha

Liberty creating tracking stocks, says Sirius offer now void

  • Liberty Media (LMCA) is creating two new tracking stocks: One will be known as Liberty Media, and the other Liberty Broadband. Investors will receive one share of the former tracking stock, and four shares of the latter, for each Liberty share they currently own.
  • Shareholders will also get "a subscription right to acquire one additional series A or series B share of Liberty Broadband tracking stock for every five shares of series A or five shares of series B Liberty Broadband tracking stock they receive in the Distribution."
  • The subscription rights will be priced at "a 20% discount to the 20-trading day volume weighted average trading price of Liberty Broadband tracking stock following the closing of the Distribution."
  • The tracking stocks are expected to trade under the symbols LBRDA and LBRDB. The broadband tracking stock will cover Liberty's stakes in Charter and Time Warner Cable, and its TruePosition subsidiary.
  • As a result of the change, Liberty says its previous offer for Sirius XM (SIRI) is "no longer applicable." The company adds it remains an "enthusiastic" owner of 53% of Sirius.
  • SIRI -2.1% AH. LMCA +0.7%.
Comments (37)
  • abovegod
    , contributor
    Comments (35) | Send Message
     
    SIRI stock owners bail now. Apple is taking over radio with exclusive contracts with the top talent. Invest in Fanny & Freddy Mac for some real fun.
    13 Mar, 06:32 PM Reply Like
  • Mike G G
    , contributor
    Comments (5) | Send Message
     
    Hey Copernicus,

     

    Fanny & Freddy this.

     

    Mike
    13 Mar, 06:48 PM Reply Like
  • gardnmi
    , contributor
    Comments (96) | Send Message
     
    Lol..not at your comment but how dumb you sound.
    13 Mar, 06:49 PM Reply Like
  • Stephen Faulkner
    , contributor
    Comments (8235) | Send Message
     
    "Hey Copernicus"

     

    lol....
    13 Mar, 09:24 PM Reply Like
  • rbasye
    , contributor
    Comments (2) | Send Message
     
    Yeah ok. When APPL gets the rights to exclusive content let me know. Right not they are a pandora wannabe.
    13 Mar, 11:28 PM Reply Like
  • Mitchr777
    , contributor
    Comments (4) | Send Message
     
    Very happy. I bought SIRI stock to own SIRI. Never wanted non voting Liberty C shares. Good to be free of this terrible 'offer'. Now SIRI can be free to trade on its own merit. For the guy at the top of the comments - first they said we were toast because of Pandora....now its another no content music plan. SIRI is the one that is in most every car and has all the content. Proven to matter in the end as every other contender has not stopped the growth. Before this 'offer' analysts were calling for prices at $4.00 and higher and there was an aggressive buyback program in effect that can now continue as originally planned. now SIRI can stand on its own 2 feet again and also resume the buy back program. The buy back program alone was very positive for the stock price movement before this nightmare with the Liberty offer started. I will be buying more tomorrow on this dip since this news may originally be perceived as negative. Thank god this insane 'offer' is null and void!!!!!!!
    13 Mar, 07:04 PM Reply Like
  • WhatdoIknow1
    , contributor
    Comments (658) | Send Message
     
    I think the negative won't found in what is perceived but rather in the exodus of those that were only in because of the deal. I too am glad the deal has come to an end.

     

    Long SIRI
    13 Mar, 07:44 PM Reply Like
  • rvn0
    , contributor
    Comments (137) | Send Message
     
    Think I may join you in a buying spree now that SIRI is free of the Liberty yoke. SIRI is still the leader and all others are just playing catch up.
    13 Mar, 10:06 PM Reply Like
  • user692741
    , contributor
    Comments (17) | Send Message
     
    Let the stock buy backs resume and let's get back to business. Hopefully this distraction from liberty will be over now.
    13 Mar, 07:27 PM Reply Like
  • jimosanantonio
    , contributor
    Comments (9) | Send Message
     
    Free At Last! Free At Last! Free At Last!!! Lookin' at $4.50!!!
    13 Mar, 07:31 PM Reply Like
  • Jerry7764
    , contributor
    Comments (15) | Send Message
     
    I am VERY happy.
    The stock may drop for a couple of days, but I firmly believe that after that it will start its climb back to $ 4.00 plus.
    I will now consider buying more to add to my position.
    SIRI still has the best content than all of the competiton.

     

    Naysayers get lost

     

    Jerry
    13 Mar, 07:40 PM Reply Like
  • Stephen Faulkner
    , contributor
    Comments (8235) | Send Message
     
    Bingo.

     

    "The stock may drop for a couple of days, but I firmly believe that after that it will start its climb back to $ 4.00 plus.
    I will now consider buying more to add to my position."

     

    Getting lots of messages like this. Wrote an article and have 7 more ... watch for an arb unwind and selling pressure very short term but untimately a bounce. Traders can guess a bottom.... could be around here, could be around $3 for a gap fill... me I would have bought AH and just been done with it :) but I'm not in a cash position to do that....
    13 Mar, 09:26 PM Reply Like
  • Newgate
    , contributor
    Comments (110) | Send Message
     
    I second your Bingo, Stephen. Maybe it was good you didn't have the cash to buy AH. I'm in the same boat. Quite a sell off. But, tomorrow, starting with premarket at 6:00 AM, should be an exciting day. If the SP moves up on high volume, look out. All those who bailed will wish they hadn't.
    13 Mar, 10:53 PM Reply Like
  • Stephen Faulkner
    , contributor
    Comments (8235) | Send Message
     
    To be honest I have never attempted to trade options AH and that is what I would want anyways (don't even think you can? I should probably look into that... can buy / short against them in emergency situations )

     

    I have some cash ready but it's just the monthly amount. It's not going to mean anything to me in the grand scheme of things.
    13 Mar, 11:03 PM Reply Like
  • Ol Blue Eyes
    , contributor
    Comments (770) | Send Message
     
    Well, I have to admit, this is way over my head. If Sirius was selling at $3.57 before Liberty made the takeover announcement, about 40 days later, after the offer has been voided, why is it that I'll be able to buy Sirius at $3.29 when the market opens tomorrow?

     

    And why does SXM say that Sirius might not reach $4.00 again until next year?

     

    I am guessing that a number of new SA Sirius articles will appear at 12:01 am this morning.
    13 Mar, 11:22 PM Reply Like
  • acrturus
    , contributor
    Comments (40) | Send Message
     
    Some good news after today's crap market. Let Sirius run.
    13 Mar, 08:07 PM Reply Like
  • soundwaves
    , contributor
    Comments (15) | Send Message
     
    Oh what a beautiful day!
    Long SIRI!! I can't say what I think of that first comment...."(
    13 Mar, 08:40 PM Reply Like
  • mansiri
    , contributor
    Comments (18) | Send Message
     
    that first comments name said it all=AboveGod,wow-talk about a high opinion of one's self
    13 Mar, 08:47 PM Reply Like
  • Flytowin
    , contributor
    Comments (153) | Send Message
     
    WOOOOOHOOOOO
    13 Mar, 09:14 PM Reply Like
  • crabnort
    , contributor
    Comments (23) | Send Message
     
    Lets not get ahead of ourselves,Who knows what Malone might do next. I would like to hear more from the big three,Stephen Faulkner,Crunching Numbers and Spencer Osborne, since I believe these three have the best thoughts on our beloved siri. From there i think that I might be able to grasp what these lastest moves mean. Does this mean that our next concern might be the RMT? Right now I'm somewhat in a fog as I can only wonder how many of us longs have any inkling of what this means. They surely have my attention now! May the longs prosper!
    13 Mar, 09:58 PM Reply Like
  • Stephen Faulkner
    , contributor
    Comments (8235) | Send Message
     
    Don't even think about an RMT for awhile.

     

    I have an article in for short term stuff. There appears to be a significant arb position that would now be hurting big time... they may cut and run on both ends of the trade.

     

    Just don't succumb to short term nonsense from that unless you think you know exactly what you are doing. Could be significant opportunity here short term (and that short term could last an hour, a day, a week...).
    13 Mar, 10:07 PM Reply Like
  • SXM_Permabull4Life
    , contributor
    Comments (257) | Send Message
     
    Stephen, while I ultimately would have liked a deal (an improved one, that is) as I saw long term benefits to that, I am not troubled by the recent turn of events either. I was in SIRI before, so now it is just back to the way it was, so to speak. It is still an excellent company on its own and I also do not think this is Liberty's last dance with SIRI.

     

    As for the short term, those who were anticipating a "sweeter deal" will get out, and there's the perception of Malone not finding enough value to warrant paying more.

     

    Beyond that, I'm concerned short term about 44% to 42% conversion, and I'm concerned about subs given less than expected car sales in the previous 2 months. We'll see if the buyback picks up in earnest though now with SIRI trading at bargain prices. Beyond those concerns though...back to business as usual and any kind of a guidance "beat" should be taken in stride and send SIRI back upward...but it may require some patience in my opinion - gotta watch the macro too. Gosh, hopefully back to $4+ by Jan 2015. We all know why. $5+ would be the bomb, but, I'm not going to be greedy. :-p
    13 Mar, 10:35 PM Reply Like
  • Stephen Faulkner
    , contributor
    Comments (8235) | Send Message
     
    People always concerned about quarter to quarter things :) Zoom out :P

     

    I'll be happy with anything this year over $3.57. Each penny is about a percent.
    13 Mar, 11:06 PM Reply Like
  • SXM_Permabull4Life
    , contributor
    Comments (257) | Send Message
     
    Thanks Stephen - only for the sake of my options am I hopeful for $4 although I have had an opportunity to lower my cost basis (and will late next week further if the price stays low for a short while longer). That said they are a small portion of my total investment, but it would be nice to be in the black on everything. :)

     

    Given that I'm only in my 20s, I am okay taking on a bit of risk, but I do admit I should have taken your advice and gone after the $3s or $2.50s or even implemented more of a spread. If I can get $4+ this year, I'll call it a lesson learned, and will opt for a lower strike next time around. On the other hand, if I don't get $4+, it was still a valuable learning experience.
    13 Mar, 11:16 PM Reply Like
  • Stephen Faulkner
    , contributor
    Comments (8235) | Send Message
     
    I'll be thrilled $4 +. I may take opportunity as the year goes on to cap at 4.50 or 5 depending on movement. We'll see. Stupid mistake I did removing the $4 cap last year! Greedy.... would have had a 100% + year with it left on.
    14 Mar, 12:18 AM Reply Like
  • SXM_Permabull4Life
    , contributor
    Comments (257) | Send Message
     
    Stephen,

     

    I hear ya! My options were up well over 100% last year at $4.18, and I still had a nice profit when I rolled to 2015 3.50s. I'm hopeful that in say 5-10 years of investing, whatever becomes of "SIRI Money" will be money I could put towards a home of my own, starting a family, a more reliable car, etc. I can't achieve those things with a 5% gain year after year. I needed to take on some risk. But, there's a difference between assuming risk - and being foolish. I learned a valuable lesson. I think $4 would be a point I'd look at taking some off the table on my options, but I'd leave some just in case of news or any kind of event that could propel the stock towards the upper end of its trading range. This CAN be a $5 and $6 stock, especially with aggressive buybacks (I'm assuming those are back on). But question is can it happen this year? If it did, and if I did hold my options, let's just say I'd be a happy guy. I'd be a long way towards those life goals I mentioned to you. Though even at $4 I'd be profitable on those options, and if that's all I can get for now I'll take the lessons learned and plan better strategies for next year.
    14 Mar, 12:47 AM Reply Like
  • crabnort
    , contributor
    Comments (23) | Send Message
     
    To be honest Stephen, I'm not sure that I have ever really known what my mind was doing,Investing in this stock. But I lost some money in it years ago at around 7.00 ps,Started buying back at 1.78ps. Siri is now my largest investment and before the talk of the swap was a very profitable one. I now will find myself doing my dd even more than before,which will at least make my boring early retirement a little less boring. My 5 day golf trip to Mrytle beach next week will now have an added distraction in the form of bringing my laptop to keep abreast of the situation.I remain a Siri long!
    14 Mar, 08:42 AM Reply Like
  • DAYTRADR
    , contributor
    Comment (1) | Send Message
     
    Not concerned about Apple's slow response to market trends. SIRI will now concentrate on more global penetration into the China market
    13 Mar, 10:10 PM Reply Like
  • Stephen Faulkner
    , contributor
    Comments (8235) | Send Message
     
    No, SIRI will not concentrate on China.
    13 Mar, 11:07 PM Reply Like
  • Doctor Who
    , contributor
    Comments (170) | Send Message
     
    Very good news....and we go down. So many uninformed.
    13 Mar, 10:11 PM Reply Like
  • Stephen Faulkner
    , contributor
    Comments (8235) | Send Message
     
    Please read my article if it goes through. Should explain (At least my understanding of) some things.
    13 Mar, 11:07 PM Reply Like
  • Blue Doggy
    , contributor
    Comments (32) | Send Message
     
    Ladies and Gentlemen please excuse the interruption, we now return to our regularly scheduled program. Go Sirius!!!
    13 Mar, 11:04 PM Reply Like
  • eb5065
    , contributor
    Comments (4) | Send Message
     
    I too put a lot of stock in those guys (Stephen, Crunching & Spencer). Come-on guys helps us out here.
    I'v been riding siri since 2008, been in and out over the years and very happy. What's next?
    I don't remember when I first started reading you guys but it's been great. Thank You.
    Take care
    13 Mar, 11:26 PM Reply Like
  • rbasye
    , contributor
    Comments (2) | Send Message
     
    SIRI is down AH. Does this announcement mean that the stock will drop for the foreseeable future?
    13 Mar, 11:29 PM Reply Like
  • crabnort
    , contributor
    Comments (23) | Send Message
     
    Hopefully this all turns out like the wizard of OZ and everyone gets what they want!
    14 Mar, 08:48 AM Reply Like
  • crabnort
    , contributor
    Comments (23) | Send Message
     
    Just when I thought the great and powerful Oz had spoken!
    14 Mar, 08:52 AM Reply Like
  • ECapo
    , contributor
    Comments (434) | Send Message
     
    Stephen: I am looking forward to your next article and thanks for your participation here!
    15 Mar, 12:29 PM Reply Like
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