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XM-Sirius Merger: Regulatory Bull |
May 23, 2008 By Jamie Dlugosch, Editor, Investors Insights |
Jamie Dlugosch
Jamie Dlugosch is the founder and editor of the top-rated The Rational Investor. He has over 20 years of experience in financial markets including investment banking, equity analysis and research and money management.
While 30% growth is nothing to sneeze at, the number falls way short of the growth percentage that it had been generating prior to the merger announcement. The problem for SIRI is that with all of the attention on the merger and the wait for approval, the company pulled in the reins on marketing.
The economy may be a big drag for the company, but so too is this delay. Honestly, at this point, I really don’t care if the deal is approved or not. The distraction has hurt shareholders period.
Sirius won this battle a few years ago, by securing the premier content needed to draw a wide audience of subscribers. A deal with XMSR would no doubt be beneficial for the company, but they can go it alone if need be. The FCC needs to get their heads out of the clouds. The agency may play a role in the chaos that is the airwaves, but in this case they are clearly overstepping. Approve the deal and let’s all move on. Every quarter that passes by hurts both shareholders and consumers alike.
The silver lining may be that when the deal is approved shares should see a substantial boost. An aggressive, risk taking investor may look to profit in the short term with options on SIRI. Buying out-of-the-money call contracts like on a monthly basis like Ken Trester of Fast Options Profits, makes Rational sense to me.
If the government gets out of the way, this deal should get approved in short order, and those lucky few who own call options stand to gain nicely if the stock takes off. For other technology plays in the options market, I recommend checking out Ken Trester and his Fast Options Profits service. New subscribers can sign up for a risk-free 3-month trial subscription back by a 100% money-back guarantee.
I haven’t lost entire faith in capitalism and neither has Ken Trester!
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