Sirius XM Holdings and Liberty Media have completed the much-anticipated merger and split-off of Liberty SiriusXM, marking a new phase for the satellite radio broadcaster.
Alongside the corporate restructuring, Sirius XM announced a $1.17 billion stock repurchase program, a move expected to bolster the company’s stock performance in the short and long term.
The stock repurchase plan, approved by Sirius XM’s board, will be funded through a combination of cash on hand, future cash flow, and potential borrowings. This new authorization continues from the company’s previous $18 billion buyback program, which began in 2012.
The merger between Sirius XM and Liberty Media’s Sirius XM tracking stock brings a “simplified capital structure,” positioning the company for future growth, despite recent financial volatility. The restructuring also coincided with a reverse stock split, where shareholders received one share for every 10 previously held, in an effort to consolidate shares and enhance their value.
While the reverse split often indicates a company facing challenges, Sirius XM’s leadership sees it as a strategic move for long-term success. However, the company revised its 2024 cash flow projections, lowering its forecast by $200 million, which contributed to early stock price fluctuations. Despite this, Sirius XM’s stock showed resilience, climbing more than 4% in midday trading following initial drops.
With the merger and buyback program in place, Sirius XM, now trading under the symbol “SIRI” on the Nasdaq, plans to continue its dividend strategy, offering an annual yield of 4.3%. The company’s leadership views these changes as part of a broader plan to stabilize and grow in the competitive broadcasting industry.
Market Watch, Yahoo Finance, and Fast Company contributed to this report.
