FCC agreed in principal to vote to allow the merger of XM and Sirius.
XM announced that it will be offering $400M in new senior notes. The notes will help XM refinance debt related to the pending merger with Sirius. If the merger does not go through, the notes can be unwound.
Goldman Sachs analyst Mark Weinkes outlined a bearish situation for SDARS (Satellite Digital Audio Radio Service) that sent both Sirius (SIRI) and XM (XMSR) plummeting lower on heavy volume. Weinkes, who has been bearish for quite some time, went grizzly bearish. Both Sirius and XM had staved off previous anticipated Goldman lows until now, but new price targets set even lower seem to have taken the feet right out from under satellite radio.
Weinkes established new price targets of $1.75 and $6.50 for Sirius and XM respectively. These new prices are down from $2.25 and $11.50. The new prices would give more implied room at the bottom than many previously anticipated, and the new lower targets could well have given short traders more confidence that a short position would pay off better than they previously had thought.
DOJ approves Sirius Radio prosposed $5 billion buyout of XMSR. Approval still required from FCC.
Thomas Barnett, head of the U.S. Department of Justice's antitrust division, will probably announce that the agency won't block the deal, Bear Stearns analyst Robert Peck told investors in a note today.
Shares of XM Satellite Radio Holdings Inc. jumped Tuesday after federal regulators asked for information on a proposed merger with Sirius Satellite Radio Inc, with analysts saying that the request by the FCC hints that the Department of Justice may be close to approving the merger.
UBS downgraded its rating for XM Satellite Radio Inc. from ‘Buy’ to ‘Neutral’ on account of uncertainty about the company’s future subscriber growth. This caused the company’s share price to trade lower in the early trading hours. XM’s subscriber growth has slowed down as compared to the last year. The company was able to add only 338,000 net new subscribers as compared to 398,000 users added last year.
