SiriusXM shares have plummeted more than 60% year-to-date, prompting Warren Buffett's Berkshire Hathaway to increase its investment in the satellite radio company.

Berkshire Hathaway recently purchased approximately 5 million SiriusXM shares for $113 million, bringing its total holdings to 117.5 million shares—roughly a 35% stake worth $2.4 billion. The stock recently hit a decade-low of $20.58.

Key factors behind SiriusXM's decline:

• Subscriber revenue fell 5% in Q3 2024 to 33.2 million subscribers
• 800,000 fewer subscribers compared to year-end 2021
• Increased competition from streaming services like Spotify, YouTube Music, and Apple Music
• Mobile streaming has reduced the need for in-car satellite radio

Despite owning Pandora since 2019, SiriusXM still relies on satellite radio subscriptions for 70% of its total revenue. In contrast, competitor Spotify reported an 18.6% year-over-year revenue increase to $1.6 billion in Q3 2024, exceeding SiriusXM's entire subscriber revenue.

Weitz Investment remains optimistic, stating in their Q3 2024 letter: "At current prices, we believe investors are overly pessimistic about SiriusXM's future cash flows." The company is now refocusing on its core auto-listening segment to regain momentum.

Related Articles

Previous Articles