Liberty Media May Pursue Sirius: Tech Winners & Losers
NEW YORK (TheStreet) -- Shares of SIRIUS XM(SIRI) jumped 7.39% to $2.47 on news that Liberty Media(LMCA) will spin off the Starz cable network into a separate company, providing Liberty with more cash to pursue the satellite radio company and Live Nation Entertainment(LVY) .
"This transaction will provide better transparency on the Starz operating business; optimize the Starz capital structure; permit us to better pursue our strategic objectives, including creating two currencies that could be used for acquisitions; and create significant liquidity at Liberty Media, which preserves all our options with respect to SiriusXM and Live Nation," said Liberty CEO Greg Maffei in a statement on Wednesday. Liberty Media owns more than 40% of Sirius common shares.
Sirius also announced plans to sell $400 million of debt, due in 2022. The proceeds from the offering for general corporate purposes, according to a statement released Wednesday. The stock is up 35.71% year-to-date.
The San Antonio, Texas-based company earned 18 cents a share on revenue of $319 million, a revenue increase of 29% on the prior year's quarter, and above Wall Street's revenue forecast of $317.7 million. Analysts surveyed by Thomson Reuters expected earnings of 18 cents a share.
In a note to clients, Jefferies equity analyst Thomas Seitz wrote, "Given the on-time launch of OpenStack on August 1 and our expectation that additional modules will launch on schedule as well, we are confident that revenue re-acceleration is in the picture for 2013." Seitz upgraded the company from "hold" to "buy" and revised his price target from $54 to $65.
Investor confidence in eBay(EBAY) , which owns PayPal, wavered on Wednesday. Starbucks(SBUX) made a deal to bring the services of PayPal rival Square to Starbucks' 7,000 U.S. locations. PayPal is already used in Starbucks' mobile app.