This has been an interesting time for SIRIUS Satellite Radio (SIRI-NASDAQ) and XM Satellite Radio (XMSR-NASDAQ). Over the last 10 days Sirius closed on its special financing, but the companies have also been submitting ‘merger support’ press releases almost daily to help promote a favorable outcome out of the FCC review. A couple weeks ago may have marked at least a near-term turning point in some (not all) of the sentiment after a former economist of the FCC signed in favor of the merger. Whether or not he was hired to do so is only worth noting in that many of the congressmen that signed an anti-merger letter are supports by the National Association of Broadcasters, and they are in the group that is most against the merger and that has the most vested interest in blocking the deal.
An upgrade today is also helping, where boutique firm Morgan Joseph raised its rating on SIRIUS from "Hold" to "Buy." Today’s gains in SIRIUS shares marks the first time that shares have gone noticeably above the $3.00 mark since mid-April, and marks the first time above the $3.00 mark intraday since May 1. If this holds it will also mark the first closing date above $3.00 since April 27.
Once again, this is assuming it closes above today, but the recent strength has been too difficult to ignore. Shares of XM Satellite are also at the highest level since earlier in June. The actions over the last two to three weeks cannot be assumed that a deal will definitely be approved and the companies have not changed their stance that the deal will be any easier to get approved. But these recent actions combined are at least representative of two merger companies that aren’t going to get their merger blocked quietly and are not representative of wanting to give up without a serious fight.
This one is still far from over.
Jon C. Ogg
June 25, 2007
Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.
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