Coming Back To The XM Satellite (XMSR) Merger With Sirius (SIRI)

Media

Published: November 21, 2007 6:11 am

Last Updated: March 26, 2020 1:03 pm

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

The Wall Street Journal came back to the XM Satellite (XMSR) merger with Sirius (SIRI) today. The paper thinks the prospect for the marriage may have improved. Some of the car companies are behind it. Some consumer groups back the deal if subscription fees are capped.

The Journal says that the recent rally in the shares of the two companies is a sign that Wall St. likes the chances of the deal much more than it did when the plan was announced in February. But, XM’s stock is below where it was after the deal was announced. That could hardly be called a strong bet by investors.

A lot of members of Congress are against the deal. So is the National Association of Broadcasters. A review of the laws about monopolies probably speaks against the deal more than for it. One satellite broadcast company, protected by a government license, is about as close to a monopoly as it gets.

The stock prices of the two companies are up about 25% in the last three months. But, the reason for that may be less complicated than most on Wall St. think. Each company announced big increases in revenue and subscriptions in the last quarter. They still have piles of debt and still lose money, but they are growing fast and moving closer to breakeven. That, in and of itself , is a good reason for a stock to rise.

This has been under review for 24/7 Wall St.’s Special Situation Investing Newsletter for some time.

Douglas A. McIntyre

Cash Back Credit Cards Have Never Been This Good

Credit card companies are at war, handing out free rewards and benefits to win the best customers. A good cash back card can be worth thousands of dollars a year in free money, not to mention other perks like travel, insurance, and access to fancy lounges. See our top picks for the best credit cards today. You won’t want to miss some of these offers.

Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.