How to Buy Sirius XM Holdings (SIRI) Stock

Sirius XM was poised to dominate with Howard Stern, live sports and an endless assortment of musician-centric channels and comedy programs. But the once-promising platform has struggled to keep a footing in the market of iTunes and podcasts. Despite these challenges, the stock has been a winner since the merger (remember Sirius and XM were separate companies?) and its subscriber base has been surprisingly resilient. 

Interested in finding out if Sirius XM is a company worth investing in? Learn about how to buy SIRI stock here today.

How to Buy Sirius XM Holdings Stock Summary

To buy Sirius XM shares, you’ll need to follow these basic steps to get your investment account up and running:

Pick a Broker

To purchase SIRI shares (or shares of any company), you’ll need a brokerage account. Most online brokerage accounts can be opened in a matter of minutes. You’ll just need a few basic pieces of data and ID to get started, but be sure to research different brokers and choose one that best fits your needs.

Fund Your Account

It takes money to make money in the market, so you’ll need to deposit funds into your brokerage account before locating any shares. Deposits often take a few business days to fully clear, but most brokers will allow instant trading with the incoming cash as collateral.

Find and Purchase SIRI Shares

Once your account is funded, type the SIRI ticker into your brokerage account Search tab and find out what the shares are currently trading for. SIRI has over 1 billion shares in the float, so it’s a liquid and easily traded stock. Use a limit order when executing your trade to get close to your preferred price.

How to Buy Sirius XM Holdings (SIRI) Stock

Before the Great Recession, there were two companies competing for your dollars: Sirius Satellite Radio and XM Satellite Radio. The two competed in a number of different realms, including sports and comedy, but the writing seemed to be on the wall when Howard Stern announced he would be joining Sirius in 2006.

After nearly 20 years of head-to-head competition, Sirius and XM announced they would merge in 2007 in a deal worth more than $13 billion. At the time, the 2 companies had a combined 14 million subscribers. The new entity, Sirius XM, melded the programming of the 2 old stations together, although the merger faced stiff criticism from the FCC and nearly wasn’t approved. However, the new company began officially operating in 2008 and has now expanded to mobile phones, gaming consoles, smart TVs and Amazon’s Alexa. The company also purchased Pandora Radio and Stitcher to increase its internet presence.

Looking to invest in SIRI shares? Just understand the risks before buying any shares. Buying an individual stock is risky and Sirius XM has plenty of competition for listeners. 

Related content: How to Buy Pandora (PNDORA) Stock

Step-by-Step Guide:

Pick a Brokerage

The first step will be selecting a brokerage. Thankfully, you have plenty of options and most of them won’t even require a phone call. Competition is fierce amongst brokers now that commissions have been dropped to zero, so compare different brokers and find the one offering the best deal. It’s not unusual to see brokers have some type of deposit match or free share policy for new clients. But also be sure the broker fits your style and can be used to meet your goals. And don’t be afraid to do some paper trading first in order to learn the platform.

Decide How Many Shares You Want

You’ll need to decide how much of your account to dedicate to Sirius XM shares before making your investment. What’s a reasonable amount? Investing too much of your capital into a single stock like Sirius XM could end badly if the company produces poor results. Dedicate somewhere between 1% to 5% of your account balance toward SIRI shares, depending on your personal risk tolerance and investing goals.

Choose Your Order Type

Not all orders are created equal. Different order types will execute your share purchase in different ways. For example, market orders execute immediately at the market price (known as the national best bid and offer or NBBO). But while market orders are immediately executed, they’re prone to slippage and you may not get the price you want. Limit orders allow you to set a predetermined price that will automatically trigger a buy.

Execute Your Trade 

Once your trade parameters have been set, you can execute your trade to send to your broker’s order desk. The brokerage firm works with market makers to pair your buy order with a seller. Once the shares are located and purchased from the seller, your order will be filled and the shares will appear in your account. 

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Sirius XM Holdings Stock History

The history of Sirius XM stock depends on your vantage point. If you look at the chart from just before the Great Recession, you’ll see a story of an impressive recovery despite plenty of headwinds.

Screenshot from Benzinga Pro 2/12/2021

Shares fell to a low of 11 cents during the height of the Great Recession before reaching the $4 mark a few years after the merger was completed in 2013. The stock continued upward and reached its post-recession high of $7.70 in 2018. Going from $0.11 to $7.70 in less than 10 years isn’t a bad return, right? Of course, if we expand the chart out, we see the heights Sirius had previously reached.

Remember to keep your expectations in check when investing in a company like Sirius XM. A return to the highs of the Dot Com boom is unlikely to materialize.

Pros to Buying Sirius XM Holdings Stock

Investing in Sirius XM Holdings stock offers several benefits for those interested in the growing audio entertainment market. The company's solid subscription model and varied content help it maintain a dedicated customer base, which positions it well for growth in the changing media environment.

Strong Brand Recognition

Sirius XM is a recognized name in the audio entertainment market, boasting a significant number of subscribers and a solid reputation for good service. This brand awareness can contribute to steady revenue growth and investor confidence.

Diverse Revenue Streams

The company earns money from various sources, such as subscriptions, advertising, and partnerships. This variety can reduce the risks tied to depending on just one revenue source, which may result in more consistent financial performance.

Growth Potential

Sirius XM can grow by expanding its offerings, including new channels, content partnerships, and integration with emerging technologies like connected cars and smart home devices, which may help attract new subscribers.

Strong Subscriber Base

Sirius XM has a strong base of millions of subscribers, which supports consistent revenue. Ongoing strategies to keep existing subscribers and attract new ones can promote long-term growth and profitability.

Strategic Partnerships and Acquisitions

Sirius XM often partners with other companies and acquires content or technology firms to improve its services, which may lead to greater market share and new products that could boost future revenue growth.

Cons to Buying Sirius XM Holdings Stock

Investing in Sirius XM Holdings stock may offer growth opportunities, but there are also some drawbacks to keep in mind. Challenges like rising competition in the streaming industry and possible subscriber saturation could affect the stock's long-term profitability.

High Debt Levels

Sirius XM Holdings carries a considerable amount of debt on its balance sheet, which may impact its financial stability. Elevated debt levels can result in higher interest payments and restrict the company's capacity to invest in growth opportunities or deal with economic challenges.

Competitive Market

The subscription radio and streaming market has many options for consumers, including free streaming services and various music apps. This competition may impact subscriber growth and retention, which could affect the company's financial performance.

Reliance on Auto Sales

A significant amount of Sirius XM's revenue is generated through partnerships with car manufacturers for the installation of satellite radios in new cars. A drop in auto sales or a move toward alternative technologies, such as smartphone integration, could negatively impact subscriber growth and revenue.

Subscriber Saturation

Given the large number of current subscribers and a limited market, there might be restricted potential for gaining new subscribers. Significant growth in a saturated market can be difficult, which may lower expectations for revenue growth and stock performance.

Regulatory Risks

Sirius XM, being a publicly traded company that provides broadcasting services, must adhere to regulatory oversight. Changes in regulations related to content, advertising, or data privacy may lead to higher operational costs or restrict the company's operational efficiency, potentially impacting its stock price.

Sirius XM Stock Faces Headwinds but has Staying Power

Sirius XM has likely entered the value stock part of its life as the company will be fending off competitors in the music and podcasting space. The company is profitable and the stock has produced gains in 10 of the last 12 years. Plus, Sirius XM retains popular talent like Howard Stern, Dave Ramsey and a host of NPR programs. The service is affordable, too, with packages as low as $5.

Just know that subscriber growth is everything for a company like Sirius XM and the recent decline should give investors pause. The stock has responded to the subscriber stall with choppy trading sessions throughout 2020 and 2021. If you decide to invest in Sirius XM, be sure to focus on its subscriber numbers to get an idea of where the stock is going.