Right. So, Sirius XM. It’s not exactly the talk of the town, is it? Not like, you know, Netflix, where everyone’s dissecting the latest must-binge show whilst simultaneously complaining about price hikes. Or Spotify, where everyone’s endlessly curating playlists they’ll probably listen to once. SiriusXM just… *is*. Which, I suppose, is a sort of achievement in itself. Though admittedly, a slightly depressing one.
But then the share price started to wobble. Down, down, down – over 40% from its peak in the last year. Down! And suddenly, it’s less ‘quietly existing’ and more ‘potential bargain bin find’. I mean, who doesn’t love a bargain? Though I constantly tell myself bargain hunting is a gateway drug to regrettable purchases. New shoes, mostly.
Anyway, everyone’s murmuring about Sirius XM. And frankly, I’m starting to get a bit obsessed. Mainly because I keep thinking I *should* understand it, and then I get distracted by trying to find a matching pair of socks. It’s a cycle.
The Subscription Thing
Apparently, the whole business model is built on subscriptions. People pay a monthly fee – depending on how flush they are, presumably – to listen to stuff. Music, sports, talk shows, the news… all beamed directly into their cars and phones and smart speakers. It’s a bit like having a personal DJ, only less glamorous and probably featuring more adverts. Subscriber revenue makes up a whopping 76% of their income. Which, logically, means keeping subscribers is kind of important. Don’t they know this?
They also get money from advertising—20% of revenue. Though honestly, I usually just skip the adverts. Everyone does, right? Except the people trying to sell us things, obviously. And a small percentage of revenue – 4% – comes from licensing and other stuff. It’s all rather… modular.
So, it’s a bit old-school (satellite radio!) meets new-school (streaming!). A hybrid. Like me, trying to navigate the world of TikTok. Which, by the way, I don’t. Not really.
Warren Buffett’s Involved. Which Is… Intriging.
Right. This is the interesting bit. Berkshire Hathaway – Warren Buffett’s company – owns a massive chunk of Sirius XM. Like, 35.4% massive. Which is… a lot. They’ve been accumulating shares for *years*. Which suggests either they know something I don’t (highly likely) or they have a very, very patient accountant.
What are the reasons? Theories abound. It’s a stable business, apparently. People keep driving (despite the rising cost of petrol and the increasing availability of public transport… though let’s be honest, who actually *takes* public transport?). They’re loyal subscribers. Plus, Sirius XM is strangely sensible with its money. Instead of splashing out on flashy acquisitions, they give it back to shareholders. Buybacks and dividends. Mundane, but effective. It’s all very… sensible. It’s almost enough to make me re-evaluate my own spending habits. Almost.
Units of Cryptocurrency Lost: 12. Hours Spent Watching Charts: 9. Number of Panicked Texts to Friends: 24. This is the current state of affairs.
The Numbers. Oh, The Numbers.
The stock is cheap. Relatively. The price-to-sales ratio is currently at 1, down from a high of 3. Spotify, for comparison, is trading at 8.3 times its sales. Which sounds good, unless of course, there’s a reason it’s so cheap. Which there usually is.
And yes, there’s a reason: Things aren’t exactly booming. They had a net loss in 2024 — apparently due to “restructuring and impairment charges.” Which sounds very corporate and slightly ominous. Revenue is down, subscriber numbers are slipping. From 34.9 million in 2019 to 33.2 million in 2024. It’s not a huge drop, but it is a drop. And drops tend to become bigger drops if left unchecked. Like my motivation to go to the gym.
They’re trying to boost their advertising and podcasting business, having bought Pandora. But Pandora isn’t exactly thriving. Monthly active users are falling. Competition in podcasting is fierce. It’s all a bit… precarious. They’re relying on existing customers, and that customer base is slowly shrinking. It’s not ideal.
So, What Does It All Mean?
Sirius XM is a bit of a puzzle. It’s not growing, but it still generates a lot of cash. It has a subscription base that’s steadily diminishing, but it’s endorsed by one of the most respected investors in the world. It’s a contradiction. A paradox. Like my desire for both financial stability and spontaneous weekend trips to the coast.
Is it a value trap? A misunderstood opportunity? Honestly, I have no idea. It depends on whether they can stabilize those subscriber numbers and, crucially, breathe some life into Pandora. There’s potential for upside, if things go right. But there are also risks. As always.
Either way, it’s a company to watch. And I, for one, will be watching it… while simultaneously attempting to find those matching socks. 🧐
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2025-08-03 08:05