Shares of Sirius XM Holdings Inc SIRI are trading higher by 10% to $27.75 since Monday’s open, buoyed by news that Warren Buffett’s Berkshire Hathaway has increased its stake in the company.
What To Know: According to a regulatory filing, Berkshire recently acquired an additional 3.56 million shares of SiriusXM, with purchases made between October 9 and October 11 at prices ranging from $22.96 to $25.14, for a total investment of approximately $87 million. This brings Berkshire's total ownership to 108.7 million shares, representing a 32% stake in the company.
The timing of the stake increase is particularly relevant to SiriusXM investors, as the company is set to report its third-quarter earnings at the end of the month. Analysts project earnings of 78 cents per share on revenue of $2.19 billion, following a challenging year where the stock has dropped around 54%.
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What To Watch For: Berkshire's increased stake is viewed as a vote of confidence in the company's future. Known for its value-driven investment strategy, Berkshire typically focuses on businesses with solid fundamentals, pricing power, and robust cash flows—attributes that many believe SiriusXM still possesses despite its recent challenges.
The company’s significant free cash flow, bolstered by a long-standing subscription model, makes it attractive for long-term investors like Buffett, even in the face of short-term hurdles.
This increased stake could signal to the market that the worst may be behind SiriusXM, prompting renewed interest from institutional and retail investors alike.
How To Buy SIRI Stock
By now you're likely curious about how to participate in the market for Sirius XM Holdings – be it to purchase shares, or even attempt to bet against the company.
Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy ‘fractional shares,' which allows you to own portions of stock without buying an entire share. For example, some stock, like Berkshire Hathaway, or Amazon.com, can cost thousands of dollars to own just one share. However, if you only want to invest a fraction of that, brokerages will allow you to do so.
In the the case of Sirius XM Holdings, which is trading at $27.83 as of publishing time, $100 would buy you 3.59 shares of stock.
If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to ‘go short' a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.
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