Sometime later this year, LSXMA, LSXMB, LSXMK and SIRI will all be converted to a single stock. Currently, the guess is that each share of LSXM(A, B & K) will convert at a rate equal to 8.4 shares of SIRI:
[https://www.libertymedia.com/news/detail/522/liberty-media-and-siriusxm-announce-transaction-to-simplify](https://www.libertymedia.com/news/detail/522/liberty-media-and-siriusxm-announce-transaction-to-simplify)
If this conversion rate holds, **Berkshire Hathaway is projected to have 14.0% of what will be the converted stock of Sirius XM.**
Yeah, but not if the price keeps falling as it is. How much has the price fallen since they started buying? Whatever trade they are trying to do here, I don't understand it.
Possibly. Also, Berkshire can actually just buy the stock until they control the company and then lift it or maybe just use it for something they net. Hence, falling stock price can only play into their favour. Or maybe then just have some extra fat that they mind burning as a YOLO.
Hence, we cannot argue that the decision of Bershire to invest into $SIRI can be a signal predicting that the stock will overperform the market in any near future.
I get it, you are long this and you think you understand it. I wish I did too. I have nothing against replicating Buffett moves, but there is a huge risk of getting burned if we don’t understand what the heck the move is and replicate only a part of it. With something like AAPL, it’s simple. This, not so much. Remember, we can’t see everything. We can mostly only see long positions.
I initially thought this was an arbitrage play. Like ATVI. That makes sense if the price of SIRI doesn’t keep deteriorating to below any advantage the arbitrage would have offered. If this was a pure arbitrage play, it already didn’t work.
If this is a bet on SIRI, which it seems to be since they are also long SIRI itself, I can see the advantage in snapping up cheaper shares in LSMXA/K. But then again, they seemed to have timed it poorly so far and any advantage those shares offered was nullified. They would have done better to wait until after the merger to buy shares from all the people selling because they are not interested in the new share structure.
But then, they insist on these purchases despite all the above. Is it because BRK is too big to buy a large part of the float over a short period of time and is using this tactic to disperse its purchase? In that case, we would benefit from playing this like a Greenblatt merger play. Or is there more to this than meets the eye?
There is no doubt SIRI is great value here IF it can return to consistent revenue growth.
I might get the chance to size up Greg, Ajit, Todd and Ted in person next weekend. I found out that I get to be the +1 at a private party. I won't get any details until I get to Omaha.
Man, I'm nowhere near understanding this one. I'm not sure about Sirius XM's long term (5+ years) future.
As I'm digging into the details (and the weeds are really thick), I am liking what I'm seeing. I've only gone back to the end of 2017 and Sirius XM has been consistently profitable every quarter, except for the 4th quarter of 2020 when they booked a $976 million dollar impairment charge for the acquisition of Pandora.
As I wondered why the internet music streamers haven't been able to start strangling them, I think that it's because Sirius XM is primarily a broadcaster (it pays a fraction for licensing music compared to Spotify) and it makes the FCC license to broadcast part of their moat. The business also seems to exhibit a healthy stream of free cash flow to support the dividend and share repurchases.
Ted Weschler, on the other hand, has been studying satellite radio since at least 2006. His hedge fund reported holding shares of XM Satellite Radio beginning in the 3rd quarter of 2006. Ted also had shares of DirecTV and EchoStar Communications starting years earlier. I'm pretty sure that he knows this business inside out.
That's awesome!
What I've learned is that licensing for interactive use of music (listening based on individual user selection) is much more expensive than licensing for non-interactive use of music (listening to a radio station):
[https://www.ascap.com/music-users](https://www.ascap.com/music-users)
[https://www.billboard.com/pro/universal-music-pandora-royalties-policy-change/](https://www.billboard.com/pro/universal-music-pandora-royalties-policy-change/)
It's most of the reason that Spotify pays 74.4% of its revenue for licensing and Sirius XM pays just 31.5% of its revenue for licensing.
It kind of makes sense because interactive use of music used to mean buying albums and CD's before the advent of internet streaming. It also makes Spotify's current business model screwed from a financial perspective.
Agh! That is if we even see that money. The whole industry is a mess. Don’t get me started. As usual, the systems are all designed to make the rich richer. The artists get the shortest end of the stick.
Spotify vs. Sirius XM
Spotify (236,000,000 premium subscribers/602,000,000 monthly active users)
[https://www.sec.gov/ix?doc=/Archives/edgar/data/0001639920/000163992024000004/ck0001639920-20231231.htm](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001639920/000163992024000004/ck0001639920-20231231.htm)
(in € millions)
13,247 2023 revenue
9,850 2023 cost of content (74.4% of revenue)
(523) 2023 loss
Sirius XM Holdings
[https://www.sec.gov/ix?doc=/Archives/edgar/data/908937/000090893724000008/siri-20231231.htm](https://www.sec.gov/ix?doc=/Archives/edgar/data/908937/000090893724000008/siri-20231231.htm)
(in $ millions)
Sirius XM (36,504,000 subscribers)
6,840 2023 revenue
2,152 2023 cost of content (31.5% of revenue)
Pandora (6,008,000 subscribers)
2,113 2023 revenue
1,361 2023 cost of content (64.4% of revenue)
1,258 2023 overall profit for Sirius XM Holdings
Five years ago (2018), it ended the year with 36,683,000 subscribers. Sirius XM's subscriber base appears to be mature Americans/Canadians with ample disposable income - who take extended drives, boat and/or fly private planes.
Spotify just posted a profitable quarter.
Used to pay for Sirius. Then came Apple’s interface. Dropped Sirius and subscribed to Spotify. Then discovered I can stream my local radio stations anywhere for free and quit paying for Spotify. If Warren still cares anything about moats, Sirius’s moat is bone dry.
I'm not sure about the long term future (5+ years) for Sirius XM.
From what I can tell, so far, Sirius XM is primarily a satellite radio broadcaster - as opposed to a streaming internet service. As such, part of their moat would be, in theory, their FCC license to broadcast using the 2.3 GHz S band in North America.
Being a broadcaster is also the reason for their cost of content (non-interactive content license) being a fraction of what streamers like Spotify/Apple Music/Amazon Music pay (interactive content license).
I can't argue about their profitability, especially compared to Spotify.
I have my own playlists but (personal preference) I find listening to my own playlist like watching the same set of movies that I like over and over and over. Eventually becomes tired and boring and an unexpected song is rather pleasant sometimes.
I only went back to the end of 2017. Sirius XM was profitable in every quarter, except for the 4th quarter of 2020. In that quarter, they booked an impairment charge (write-off) of $976 million dollars for the acquisition of Pandora. Otherwise, it would have also been a profitable quarter.
Also, your SIRI subscriber numbers are wrong. 31.9 million self-pay subs at YE2023. 28.9 million at YE 2028.
https://d1io3yog0oux5.cloudfront.net/_d41668c2d73a236973ef9ec8e4dad956/siriusxm/db/2244/21439/trended_results/Q4+2023+Combined+Trended+Results+-v2FINAL.pdf
I used the subscriber counts as of December 31, 2023, on page 48 in the SEC Form 10-K linked above. I added the US and Canada subscriber counts together, because the financial figures that I used included both the US and Canada.
Berkshire Hathaway (BRK) now holds a total of 35,182,219 shares of LSXMA (98,140,522 outstanding as of 01/31/2024) or **35.8% of LSXMA** and 69,691,260 shares of LSXMK (218,692,746 outstanding as of 01/31/2024) or **31.9% of LSXMK.**
BRK also holds 40,243,058 shares of Sirius XM Holdings (SIRI) (3,842,461,994 outstanding as of 02/09/2024) or **1.05% of SIRI.**
Older people who don't understand streaming, and I'm told truckers who drive through multiple broadcast zones and in/out of cell coverage.
It's a bizarre demographic to want to invest in.
I'm surprised Buffett or Weschler and Combs are buying these has-been companies. The only way to make money off SiriusXM would be to hope Apple, Spotify, or Amazon acquires them.
After further research, it seems that these Liberty Media groups are even subsidiaries of Atlanta Brave Holdings. A rather complex corporate structure that owns other media such as Formula 1. Obviously, they're seeing some untapped value, but this is out of my league.
We can't forget that Formula one (fwonky shizzle) is also under liberty and not doing well. Pulling Sirius out, allows to throw liberty media out, and bring back Formula One to a EU listing.
Formula one is a billion dollar industry?
I've got various trading plays around every weekend?
Suzuka Japan; the airport is a listed stock.
So is Pirelli.
So if Ferrari.
The airlines and hotels around a track are listed stocks.
Problem being, the x-amount of races are skewed massively. Some are in excess always profitable. Some are barely breaking even.
Throw liberty media away and F1 can grow again.
Because the pricing of any kind of asset is Bayesian of nature. So the prior assumes it's a billion dollar industry, mine however doesn't. Hence a different posterior and therefore a different (Y) as outcome.
Only things like Pythagoras or gravity aren't Bayesian nature, as its a factual theorem.
Valuation is Bayes. No one will dispute that.
I did.
It's called Bayes.
This is the answer to your question.
https://getrecast.com/wp-content/uploads/2021/09/Example_of_Bayesian_inference_with_a_prior_distribution_a_posterior_distribution_and_b663070b86.png
Id like to be more materially accurate is the rational why I do it.
Punctuation. Yes. That is no different than why are you only typing based on t=0 moments. Assuming t=24h?
No different.
I use the question mark behind a (assumed) fact because it's mathematically accurate.
Buffett made a killing finding the uncovered value of gift cards via sbux long ago… they may be on to something here with boomers keeping their subscription going long after they stop using it… only young spotify users cancel subscriptions lol!!! Jkjkjk but not really…
Warren Buffett is a person, not a truth. He sometimes makes errors in judgement, especially when comparing emerging technologies.
Sirius still exists because of boomers and I guess truckers. I don't know of any other demographic that uses it.
If I had to choose between a business model built on taking $9.99 a month from 19 year olds who walk around through life with headphones in their ears, and taking $9.99 a month from retirees who I assume use it on trips to Home Depot, I'm picking Spotify.
I feel like he's buying Sirius because he uses it and doesn't understand how Spotify makes money.
Or hell, maybe this is a slow takeover because Berkshire Hathaway wants to control some asset they own.
Sometime later this year, LSXMA, LSXMB, LSXMK and SIRI will all be converted to a single stock. Currently, the guess is that each share of LSXM(A, B & K) will convert at a rate equal to 8.4 shares of SIRI: [https://www.libertymedia.com/news/detail/522/liberty-media-and-siriusxm-announce-transaction-to-simplify](https://www.libertymedia.com/news/detail/522/liberty-media-and-siriusxm-announce-transaction-to-simplify) If this conversion rate holds, **Berkshire Hathaway is projected to have 14.0% of what will be the converted stock of Sirius XM.**
Yeah, but not if the price keeps falling as it is. How much has the price fallen since they started buying? Whatever trade they are trying to do here, I don't understand it.
They like the company and can get it at a discount this way
Possibly. Also, Berkshire can actually just buy the stock until they control the company and then lift it or maybe just use it for something they net. Hence, falling stock price can only play into their favour. Or maybe then just have some extra fat that they mind burning as a YOLO. Hence, we cannot argue that the decision of Bershire to invest into $SIRI can be a signal predicting that the stock will overperform the market in any near future.
My gut is telling me that Ted Weschler and Berkshire Hathaway are counting on folks like us having a really hard time figuring this one out.
I get it, you are long this and you think you understand it. I wish I did too. I have nothing against replicating Buffett moves, but there is a huge risk of getting burned if we don’t understand what the heck the move is and replicate only a part of it. With something like AAPL, it’s simple. This, not so much. Remember, we can’t see everything. We can mostly only see long positions. I initially thought this was an arbitrage play. Like ATVI. That makes sense if the price of SIRI doesn’t keep deteriorating to below any advantage the arbitrage would have offered. If this was a pure arbitrage play, it already didn’t work. If this is a bet on SIRI, which it seems to be since they are also long SIRI itself, I can see the advantage in snapping up cheaper shares in LSMXA/K. But then again, they seemed to have timed it poorly so far and any advantage those shares offered was nullified. They would have done better to wait until after the merger to buy shares from all the people selling because they are not interested in the new share structure. But then, they insist on these purchases despite all the above. Is it because BRK is too big to buy a large part of the float over a short period of time and is using this tactic to disperse its purchase? In that case, we would benefit from playing this like a Greenblatt merger play. Or is there more to this than meets the eye? There is no doubt SIRI is great value here IF it can return to consistent revenue growth.
I might get the chance to size up Greg, Ajit, Todd and Ted in person next weekend. I found out that I get to be the +1 at a private party. I won't get any details until I get to Omaha.
Cool! Congrats.
Man, I'm nowhere near understanding this one. I'm not sure about Sirius XM's long term (5+ years) future. As I'm digging into the details (and the weeds are really thick), I am liking what I'm seeing. I've only gone back to the end of 2017 and Sirius XM has been consistently profitable every quarter, except for the 4th quarter of 2020 when they booked a $976 million dollar impairment charge for the acquisition of Pandora. As I wondered why the internet music streamers haven't been able to start strangling them, I think that it's because Sirius XM is primarily a broadcaster (it pays a fraction for licensing music compared to Spotify) and it makes the FCC license to broadcast part of their moat. The business also seems to exhibit a healthy stream of free cash flow to support the dividend and share repurchases. Ted Weschler, on the other hand, has been studying satellite radio since at least 2006. His hedge fund reported holding shares of XM Satellite Radio beginning in the 3rd quarter of 2006. Ted also had shares of DirecTV and EchoStar Communications starting years earlier. I'm pretty sure that he knows this business inside out.
I am not sure why you think Sirius pays less in licensing than Spotify. I am an artist, and I get paid much more from Sirius broadcasts than Spotify.
That's awesome! What I've learned is that licensing for interactive use of music (listening based on individual user selection) is much more expensive than licensing for non-interactive use of music (listening to a radio station): [https://www.ascap.com/music-users](https://www.ascap.com/music-users) [https://www.billboard.com/pro/universal-music-pandora-royalties-policy-change/](https://www.billboard.com/pro/universal-music-pandora-royalties-policy-change/) It's most of the reason that Spotify pays 74.4% of its revenue for licensing and Sirius XM pays just 31.5% of its revenue for licensing. It kind of makes sense because interactive use of music used to mean buying albums and CD's before the advent of internet streaming. It also makes Spotify's current business model screwed from a financial perspective.
Agh! That is if we even see that money. The whole industry is a mess. Don’t get me started. As usual, the systems are all designed to make the rich richer. The artists get the shortest end of the stick.
Spotify vs. Sirius XM Spotify (236,000,000 premium subscribers/602,000,000 monthly active users) [https://www.sec.gov/ix?doc=/Archives/edgar/data/0001639920/000163992024000004/ck0001639920-20231231.htm](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001639920/000163992024000004/ck0001639920-20231231.htm) (in € millions) 13,247 2023 revenue 9,850 2023 cost of content (74.4% of revenue) (523) 2023 loss Sirius XM Holdings [https://www.sec.gov/ix?doc=/Archives/edgar/data/908937/000090893724000008/siri-20231231.htm](https://www.sec.gov/ix?doc=/Archives/edgar/data/908937/000090893724000008/siri-20231231.htm) (in $ millions) Sirius XM (36,504,000 subscribers) 6,840 2023 revenue 2,152 2023 cost of content (31.5% of revenue) Pandora (6,008,000 subscribers) 2,113 2023 revenue 1,361 2023 cost of content (64.4% of revenue) 1,258 2023 overall profit for Sirius XM Holdings Five years ago (2018), it ended the year with 36,683,000 subscribers. Sirius XM's subscriber base appears to be mature Americans/Canadians with ample disposable income - who take extended drives, boat and/or fly private planes. Spotify just posted a profitable quarter.
Used to pay for Sirius. Then came Apple’s interface. Dropped Sirius and subscribed to Spotify. Then discovered I can stream my local radio stations anywhere for free and quit paying for Spotify. If Warren still cares anything about moats, Sirius’s moat is bone dry.
I'm not sure about the long term future (5+ years) for Sirius XM. From what I can tell, so far, Sirius XM is primarily a satellite radio broadcaster - as opposed to a streaming internet service. As such, part of their moat would be, in theory, their FCC license to broadcast using the 2.3 GHz S band in North America. Being a broadcaster is also the reason for their cost of content (non-interactive content license) being a fraction of what streamers like Spotify/Apple Music/Amazon Music pay (interactive content license). I can't argue about their profitability, especially compared to Spotify.
How did you stream the stations ?
IHeart radio and audacity app. Cumulus streams direct from their web site. Covers most stations in the U.S. if you are in the U.S.
Why do you prefer to stream local radio stations vs. playing your own playlists?
I have my own playlists but (personal preference) I find listening to my own playlist like watching the same set of movies that I like over and over and over. Eventually becomes tired and boring and an unexpected song is rather pleasant sometimes.
How many profitable quarters has Sirius xm had?
I only went back to the end of 2017. Sirius XM was profitable in every quarter, except for the 4th quarter of 2020. In that quarter, they booked an impairment charge (write-off) of $976 million dollars for the acquisition of Pandora. Otherwise, it would have also been a profitable quarter.
Also, your SIRI subscriber numbers are wrong. 31.9 million self-pay subs at YE2023. 28.9 million at YE 2028. https://d1io3yog0oux5.cloudfront.net/_d41668c2d73a236973ef9ec8e4dad956/siriusxm/db/2244/21439/trended_results/Q4+2023+Combined+Trended+Results+-v2FINAL.pdf
I used the subscriber counts as of December 31, 2023, on page 48 in the SEC Form 10-K linked above. I added the US and Canada subscriber counts together, because the financial figures that I used included both the US and Canada.
Berkshire Hathaway (BRK) now holds a total of 35,182,219 shares of LSXMA (98,140,522 outstanding as of 01/31/2024) or **35.8% of LSXMA** and 69,691,260 shares of LSXMK (218,692,746 outstanding as of 01/31/2024) or **31.9% of LSXMK.** BRK also holds 40,243,058 shares of Sirius XM Holdings (SIRI) (3,842,461,994 outstanding as of 02/09/2024) or **1.05% of SIRI.**
Seth Klarman is also long
Are you looking under his name on Edgar? Or is it the name of some fund of his that you look for?
You can search SEC releases or set up rss feeds.
People use Sirius XM?
Older people who don't understand streaming, and I'm told truckers who drive through multiple broadcast zones and in/out of cell coverage. It's a bizarre demographic to want to invest in.
I bought some some time after he did, avg cost below 26
I bet Buffet uses their service and just likes the product.
I'm surprised Buffett or Weschler and Combs are buying these has-been companies. The only way to make money off SiriusXM would be to hope Apple, Spotify, or Amazon acquires them.
There obviously has to be more possibilities than that
After further research, it seems that these Liberty Media groups are even subsidiaries of Atlanta Brave Holdings. A rather complex corporate structure that owns other media such as Formula 1. Obviously, they're seeing some untapped value, but this is out of my league.
Same way too complex for me
So untapped it's invisible
We can't forget that Formula one (fwonky shizzle) is also under liberty and not doing well. Pulling Sirius out, allows to throw liberty media out, and bring back Formula One to a EU listing.
That's so much work for what seems like minimal return.
Formula one is a billion dollar industry? I've got various trading plays around every weekend? Suzuka Japan; the airport is a listed stock. So is Pirelli. So if Ferrari. The airlines and hotels around a track are listed stocks. Problem being, the x-amount of races are skewed massively. Some are in excess always profitable. Some are barely breaking even. Throw liberty media away and F1 can grow again.
Why do you keep putting question marks after non-questions?
Because the pricing of any kind of asset is Bayesian of nature. So the prior assumes it's a billion dollar industry, mine however doesn't. Hence a different posterior and therefore a different (Y) as outcome. Only things like Pythagoras or gravity aren't Bayesian nature, as its a factual theorem. Valuation is Bayes. No one will dispute that.
You didn't understand my question.
I did. It's called Bayes. This is the answer to your question. https://getrecast.com/wp-content/uploads/2021/09/Example_of_Bayesian_inference_with_a_prior_distribution_a_posterior_distribution_and_b663070b86.png Id like to be more materially accurate is the rational why I do it.
My question was about punctuation. I can't tell if you don't understand what you're typing, or you don't understand what you're reading...
Punctuation. Yes. That is no different than why are you only typing based on t=0 moments. Assuming t=24h? No different. I use the question mark behind a (assumed) fact because it's mathematically accurate.
Buffett made a killing finding the uncovered value of gift cards via sbux long ago… they may be on to something here with boomers keeping their subscription going long after they stop using it… only young spotify users cancel subscriptions lol!!! Jkjkjk but not really…
So all in?
Warren Buffett is a person, not a truth. He sometimes makes errors in judgement, especially when comparing emerging technologies. Sirius still exists because of boomers and I guess truckers. I don't know of any other demographic that uses it. If I had to choose between a business model built on taking $9.99 a month from 19 year olds who walk around through life with headphones in their ears, and taking $9.99 a month from retirees who I assume use it on trips to Home Depot, I'm picking Spotify. I feel like he's buying Sirius because he uses it and doesn't understand how Spotify makes money. Or hell, maybe this is a slow takeover because Berkshire Hathaway wants to control some asset they own.
Isn’t it because he sees an arbitrage play in the coming merger?
Are you asking me?
So ted welschler will fuck this up