Now that Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. have approval from the Justice Department, let's check in on the investment analysts' take on the road ahead...
- Benjamin Swinburne, Morgan Stanley:
Following closing of the merger, both Sirius and XM "should benefit from some lift in demand from combined programming offerings." But a critical factor, from an investor's standpoint, will be the ability to renegotiate large OEM and programming contracts, in addition to creating new demand and increasing conversions.
"The challenges facing the industry, however, will not go away as a result of the merger," writes Swinburne. Now the focus shifts to free cash-flow. - Jeff Wlodarczak, Wachovia Capital Markets:
"With the DOJ decision now out of the way, FCC approval would appear to be a foregone conclusion," writes Wlodarczak in a recent note, noting that there are likely to be conditions placed by the Commission.
Wachovia doubts the merger will "materially reignite demand" for satellite radio, but "realistically as a combined entity they have a much greater chance for long-term survival," in their view. - David Bank, RBC Capital Markets:
RBC continues to "remain on the sidelines" from an investor's view, noting that "any 'bounce' from potential completion of the merger may largely factored into current valuation."
But what of the FCC? Bank notes that the FCC tends to "follow in the DOJ's footsteps" so they're more confident in final approval.
"In terms of timing, it's difficult to know, but some time in the next 2 weeks to 8 weeks would seem realistic given chatter we are hearing from our Industry sources," write the RBC analyst. The question now is the conditions that the FCC will impose. - Blair Levin, Stifel Nicolaus:
Aside from what was already posted, Stifel Nicolaus notes that there has been some significant negotiations regarding conditions at the FCC. And that there's one wildcard still out there: The NAB.
"If the FCC clears the deal, it's possible the NAB could challenge the FCC decision in court," writes Levin. "But we would expect the broadcasters' legal prospects to be uphill."
After 400 days of reading all short interest loser BS comments, finally you can all eat your shorts!
Don't bet against Mel! You bunch of F-kin losers. Time to crawl back under your short rocks.
Thank you Orbicast for always providing the information I needed to stay positive.
Long time SIRI XMSR investor.
THANK YOU ORBITCAST!
Agreed, Orbitcast is proving itself to be an invaluable source of information during this period.