Warren Buffett, Steven A Cohen, and Seth Klarman all buying stakes in this household name.
Overview:
How can you not be intrigued when top names like Buffett, Klarman, and Steven A. Cohen are all buying.
This is a complicated transaction. So let me provide an overview followed by all of the details.
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XM Sirius Exchange Overview:
Liberty is creating a new corporate structure with one stock for SiriusXM. And in order to do that, they need to offer existing shareholders an attractive alternative to give up their shares in exchange for the new stock.
The trade involves buying Liberty SiriusXM Holdings, a tracking stock issued by Liberty Media for Liberty’s 84% stake in Sirius XM Holdings
Liberty Sirius XM has two liquid classes of tracking stock traded under tickers LSXMA and LSXMK.
SIRI is the satellite radio company. Liberty Media is controlled by media mogul John Malone.
Liberty Sirius XM holders stand to get 8.4 shares of new Sirius XM stock for each of their shares under the terms of the deal while existing Sirius XM holders will see a one-for-one swap.
It’s a complicated transaction from one of John Malone’s spin- off
Analysts estimate that upon closing, it will deliver ~50% upside from current prices.
According to the Wall Street Journal, Berkshire holds about 21% of the tracker—some 70 million shares worth about $3.2 billion—and it purchased about seven million shares during January.
Here’s why investors are so excited.