Has Sirius XM Bottomed?
NEW YORK (TheStreet) -- An interesting thing happened recently that surprised me; I'm sure it surprised many investors. Shares of satellite radio giant Sirius XM(SIRI) went up.
How baffling, when you consider that, as predicted, CEO Mel Karmazin executed two separate sales of his options that total 7.6 million shares, at an average price of $1.83, as the graphic above shows.
As we've come to know, Karmazin's sales are preplanned and continue intentions to sell 60 million worth of options, said to be part of a strategy for his financial planning in connection with his philanthropic efforts. Once he's finished with these transactions, he will still own approximately 70 million shares, as well as options of the company.
We now know the pattern. Investors who have been monitoring these transactions can see that they started in April: On April 16 and April 17, he sold just a little more than 11 million shares. Then again in May, there were an additional 13 million shares sold. However, this time around, that number has now been cut in half, with each event happening on the third week of the month.
Karmazin, in this case, deserves some credit for what appears to be an acknowledgement that he cares about making it difficult for Liberty Media(LMCA) to acquire cheap shares at less than what would be considered premium value. So for as much criticism as Karmazin has taken for "how this looks," frustrated investors should take solace in the fact that (at the moment) the unloading appears to be slowing down. The question now is, has the stock suddenly reached bottom?
I ask this for a host of reasons: First, the macro concerns have had a considerable impact on the stock. It has never traded on fundamentals, but some of the issues that have suppressed its upward movement appear to be (somewhat) going away. Additionally, with the possibility that QE3 may now be on the table, I think it gives investors an opportunity to now get in on the stock at a price that I would consider somewhat under its fair-market value of $2.00.