SIRIUS XM Radio Inc.
), the largest commercial satellite-radio service operator in the
U.S., has decided to enhance its shareholders' wealth. Yesterday,
the Board of Directors of SIRIUS XM has approved a $2 billion
common stock repurchase program. Shares of common stock
will be purchased from time to time in the open market and in
privately negotiated transactions. Additionally, the Board also
approved a special dividend of 5 cents per share payable on
December 28, 2012 to stockholders of record as of the close of
business on December 18, 2012. The special dividend will cost the
company about $325 million.
SIRIUS XM maintains its strong performance primarily due to
impressive management execution on the back of rising auto
industry sales. Management has raised the financial outlook for
the rest of 2012 and expects the growth momentum of the company
to expand further. Despite price rise of its services, SIRIUS XM
maintains its churn rate. Solid conversion rate and an effective
marketing strategy helped the company to strengthen its
The biggest beneficiary of this newly initiated share buyback
and special dividend will be the company's largest shareholder
Liberty Media Corp.
). Liberty Media has filed a new application to the U.S. Federal
Communications Commission, in which the company stated its
intention to acquire more than 50% of SIRIUS XM, so that it can
take full control of the Board of SIRIUS XM. At present, it holds
49.8% stake in SIRIUS XM's total outstanding shares. Liberty
Media will participate in SIRIUS XM's share repurchase program in
a way that will not affect its ownership interest.
LIBERTY MDA-LC (LMCA): Free Stock Analysis
SIRIUS XM RADIO (SIRI): Free Stock Analysis
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