Things were already looking a little mixed at satellite and streaming music giant SiriusXM (SIRI). First we heard how Berkshire Hathaway (BRK.B) bought in, picking up a new slug of shares. Then we heard how Sirius was possibly about to lose a significant draw in Howard Stern, with his contract running out. Then, President Trump himself got involved, suggesting that Stern’s decline is connected to his endorsement of Trump’s 2016 challenger, Hillary Clinton. The whole mess coalesced into a problem for investors, who expressed their distaste by selling off. Sirius shares dropped nearly 3% in Monday morning’s trading.
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Trump, in a move that was truly Trump all over, recently suggested during an Oval Office meeting where he was taking questions from the press that Stern’s show troubles basically started when Stern endorsed Hillary Clinton for president back in 2016. Trump noted “Howard Stern is a name I haven’t heard — I used to do his show, we used to have fun — but I haven’t heard that name in a long time.”
Trump then followed up the remark by noting, “You know when he went down? When he endorsed Hillary Clinton. He lost his audience. People said, ‘Give me a break.’ He went down when he endorsed Hillary Clinton.” While it is impossible to tell if that is the exact point—indeed, Stern is still at least somewhat widely heard—it may not have helped in at least some cases, particularly given that Stern’s pay was as high as it was. The contract between Stern and Sirius was for $500 million, after all.
Staff Braces for Impact
Meanwhile, there are signs that the Stern show may see a bit of a hit in quality in the near term. Reports note that Stern’s staffers are bracing for impact, and “withholding best material” as the show’s overall fate is unclear. Writers are apparently holding back on their best jokes, saving them for use on other shows once the Stern show is shut down. They are also already looking for new jobs.
Reports note that the writing “…has been on the wall for well over a year now,” and that Sirius likely would not be signing Stern up for another five year, $500 million hitch like the last contract. While there were still possibilities for shorter-term deals, the fact that Stern’s audience has reportedly dropped from around 20 million to around 125,000 does not help.
Is SiriusXM Stock a Good Buy?
Turning to Wall Street, analysts have a Hold consensus rating on SIRI stock based on three Buys, three Holds, and five Sells assigned in the past three months, as indicated by the graphic below. After a 28.12% loss in its share price over the past year, the average SIRI price target of $22.64 per share implies 7.71% upside potential.
