Warren Buffett’s Berkshire Hathaway has increased its stake in SiriusXM, now owning 32% of the satellite radio company. The conglomerate purchased roughly 3.6 million shares for about $87 million in separate transactions, following billionaire John Malone’s Liberty Media completing a deal to combine tracking stocks with the audio entertainment company. Berkshire had initially bought Liberty Media’s trackers in 2016 and began investing in Sirius tracking stocks in 2024. It is unclear whether Buffett himself is behind the move or if it was made by his investing lieutenants, Ted Weschler or Todd Combs.
Despite Berkshire’s increased stake, SiriusXM is not a popular stock on Wall Street. Out of the 14 analysts covering the company, only five gave it a buy rating, citing concerns about subscriber losses and demographic shifts. JPMorgan analyst Sebastiano Petti recently reopened coverage of SiriusXM with an underweight rating, expressing doubts about the company’s long-term growth prospects and its ability to reach a broader demographic. The recent Liberty transaction, which reduced share count by 12%, may also cause SiriusXM to pause share buybacks until 2027, negatively impacting the stock.
Following Berkshire’s disclosure of its increased stake, SiriusXM’s stock rose 8% on Monday. However, shares remain down more than 50% for the year. This investment in SiriusXM marks a departure from Berkshire’s previous major media investment in 2022, when the conglomerate bought a non-voting stake in Paramount Global’s class B shares. Buffett later revealed that the investment resulted in a significant loss and led him to reflect on consumer leisure preferences. He highlighted the competitive streaming industry, noting that the abundance of players vying for viewer dollars has resulted in a price war.
Berkshire’s move to increase its stake in SiriusXM reflects its ongoing investment strategy despite the challenges facing the company. The investment in SiriusXM comes at a time when Berkshire has been reshuffling its media assets, with the recent Liberty transaction aligning with John Malone’s restructuring of his media empire. Buffett’s firm has been strategic in its investments, utilizing merger arbitrage opportunities and diversifying its portfolio across different sectors. As Berkshire continues to navigate the ever-changing media landscape, its focus on long-term value creation remains a core principle of its investment strategy.
In conclusion, Berkshire Hathaway’s increased stake in SiriusXM signals its confidence in the long-term potential of the satellite radio company. While SiriusXM faces challenges in the competitive media industry, Berkshire’s investment underscores its commitment to finding opportunities that align with its investment philosophy. Buffett’s reflection on past media investments, such as Paramount Global, has influenced Berkshire’s approach to the evolving media landscape. As Berkshire continues to make strategic investments, its focus on creating long-term value for shareholders remains a driving force behind its investment decisions.
