XM and Sirius to merge.

[DesertCat]

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For one thing, your current XM & Sirius head units are incompatible, and will not be able to receive transmissions from the other, under any circumstances.


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That doesn't matter, it means they'll have to pick one system as the future system and new users will only be able to buy one type of head units, but they'll still keep the old satellites running and provide all the same programming on both systems.

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Two, there are major antitrust implications here. Unless both companies can show that both will end up going out of business without a merger, it is highly unlikely this deal can pass antitrust muster (regardless of what the FCC says).

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This is the other problem, but neither of these money losing companies can continue successfully without being subsidized by more investors. I believe that's going to greatly help their antitrust case.

And I have a theory that if necessary they'll spin out the satellite management business from one entity (Sirius?) and make it a separate company. Then they can merge the entertainment side of Sirius (with all the programming contracts) into XM, while XM signs a long term deal with Sirius Satellite Services to maintain the old satellites. The FCC won't be able say squat about that, since one company won't own both sets of satellites.

[MicroBob]

I don't have a satellite radio unit yet.

Does this mean I would probably be wise to hold off for a little bit because new units might be required to receive all the channels?

I was at Wal-Mart last week mostly buying groceries. But I walked past the little sat-radio disaply and threw one in my cart.
But the scanner thing didn't go through when I tried to check-out so I just told the cashier to 'forget it, will get it next time.'

[offTopic]

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I hold shares in both companies (and am down a lot on XM, only down about 15% in Sirius), so I kinda hope it does go through, but I'm not holding my breath.

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Lucky you. I bought SIRI @ 7.50. [img]/images/graemlins/frown.gif[/img] Good thing I'm small potatoes...

[Greenmachine]

wow im actually pretty shocked right now that this happened so soon. I figured it would happen a couple years down the road out of desperation. I have stock in sirius i wonder whats in store for these stocks tommorow. There was a nice run up a month or so back when speculation was ramping up that a merger could be possible, but then the stocks fell back down after it seemed it woul not be possible. Def should make for an interesting Stern show tommorow morning

[Mondogarage]

Well, I'd bought my XMSR at a dollar cost average of $33....

Still, if the markets think that the merger *will* go through, maybe SIRI can hit $6 or so before the merger closing, and I can recover $25 or so for my XMSR (and I'd be well up on SIRI by that time, since I'm in at $4.40.)

For what it's worth, I ran into the same situation with CORV/BWNG being bought out by LVLT (owning shares in both companies). After years, I'm finally in the black in both. And if the merger *is* successful, the combined entity will eventually be worth more per share than what I'm into on both.

My total $$$ investment in both isn't more than about $15,000, though.

[Greenmachine]

yeah im in dollar cost average on sirius at 3.40 so im already up a little on it, but wouldnt mind a nice spike up.

[Mondogarage]

The market is going to see this as a good play for both companies. My numbers are a wild a$$ guess, but a 10% pop in SIRI tomorrow wouldn't be out of the question. And, becuase the merger agreement is for a set nunber of shares of SIRI for each share of XMSR (4.6:1, I believe), you'll see XMSR jump up tomorrow to a point where it's trading around 4.6x SIRI's share price, and stay in that general area.

While the merger's pending, unless and until it's either shot down or approved, you should see the two stocks tracking very similar to one another at that 4.6:1 rate. Right now, that would put XMSR around $17.50, give or take.

[Shadowrun]

interesting i sold my siri shares before they they dipped these last few months maybe i should have kept them now

[Mondogarage]

That depends. Did you sell them at a profit? If so, no reason to regret having sold them, but I wouldn't try to chase the imminent move up, now.

[Narcileptico]

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why are there quotes around monopoly?

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Because there are dozens of other competitors, standard free radio, CDs, and ipods for your drive to work, and even more if you use satellite radio in your home.

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Yea, standard radio has all the same competitors, but it's still illegal for one company to own all the radio stations.