Monday, October 22, 2012

Sirius XM Radio Inc (NASDAQ:SIRI) Stock Sales Almost Finished by Mel Karmazin

Sirius XM Radio Inc(NASDAQ:SIRI) CEO Mel Karmazin has finally sold shares of company stock via his adopted trading plan on October 16. 90 million shares of Sirius XM, owned by Mel through stock option awards that had vested, were sold. The final sale comprised 13.1 million shares and was completed on Monday and Tuesday. Sirius XM shares went up 5 cents this week.

Sirius XM investors were fearful of the sale, but apart from the first two sets of sale some months back, which had augmented the selling pressure in a general market downturn, Mel’s sales are like a needle in a haystack and has been devoured on the buy side.

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A possible reason could be that in spite of 90 million in sales by Mel and an additional 30 million after the close of the year, the effect has been reduced by half. Option exercises like these forced Liberty Media’s stake to be diluted and they had to buy back 50% of the sales to retain its stake in Sirius XM. Buying pressure of Liberty went up as it had to get back controlling interest. However, the timing of the sales is probably the best as of now. Investors can relax for now expectations of insider sales in November and December will not have much of an impact on the share price

Every eye and ear is trained on Mel and if he will continue with Sirius XM. Speculations are on about the terms of contract as well. Mel has managed Sirius XM quite well for the last few years, even though some say that his pace was too slow sometimes. Whether or not he stays on, he will be remembered for pulling investors through bankruptcy and huge losses during the market decline in 2009, increasing share price of the company from 5 cents to $2.84 per share, and of course, initiating the merger of Sirius and XM.
Share of SIRI are up marginally this morning. Over the past one week, the stock has gained over 5% and made multi-year high of $2.97 last week.

1 comment:

  1. Karmazin will be ALSO be remembered" for dropping the value for long-term shareholders from $6.00 to .05 cents!! It's been great for all the new holder's... and let us not forget the ABSURD $500 million dollar Stern debacle.


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