It bought 1.6 million shares of the satellite radio company Sirius XM Holdings SIRI 1.88% for about $42 million, which added to the big stake it already had in the company.
An SEC Form 4 statement late Friday shows that Berkshire bought the stock from Wednesday to Friday for an average of about $27 per share. The company now owns 110.3 million shares, which are worth about $3 billion.
Berkshire now owns 32% of Sirius XM. The service, which is mostly provided in cars, has more than 30 million self-paid subscribers.
This month, Berkshire bought 3.6 million shares and has bought a lot of Liberty Sirius XM, the tracking stock from Liberty Media FWONA 0.08% that combined with Sirius XM in September.
Ted Weschler is one of two investment managers who are in charge of about 10% of Berkshire’s $300 billion-plus stock portfolio. He is thought to be in charge of the company’s investment in Sirius XM. CEO Warren Buffett is in charge of the other 90%.
Berkshire seems to be taking advantage of the fact that Sirius XM stock is down about 50% this year because investors are worried about future customer losses. This comes after the company’s stock fell slightly in the first half of the year. On Friday, the share price went up 1.9% to $27.61.
The company is worth $9 billion but has a big net debt of $10 billion, and it wants to pay down that debt more than buying back its own shares. The stock has a return of almost 4%.
Not long ago, Barron’s wrote a positive article about the stock, pointing out that it is undervalued at about nine times its expected earnings and income for 2025.
Analysts on Wall Street have mixed feelings about the stock. Bears are worried about the debt, the high current capital spending, and the fact that stock buybacks might not start up again until 2027. Free cash flow is important to bulls because it is likely to go up over the next few years.
Since Berkshire already owns more than 30% of the company, there is a chance that it will buy more stock. Could it go as high as 40% or more? Berkshire almost never owns more than 30% of a company.
Buffett likes the Sirius XM service, especially the Siriusly Sinatra show that plays music by Frank Sinatra and other artists.
