No. of Recommendations: 2
“” Warren Buffett’s Berkshire Hathaway has increased its Liberty SiriusXM tracking stock purchases. The investment firm topped up purchases in recent days, adding another 2.8 million shares for about $85 million, according to a Form 4 filing with the Securities and Exchange Commission late Wednesday.
Berkshire purchased both the voting and nonvoting tracking stock. It now holds about 69 million shares of the tracking stock, which is valued at $2.1 billion based on Wednesday’s closing price. Its stake in the tracker is about 20%. The most recent purchases came on Friday, Tuesday, and Wednesday at a price of about $30 per share.
The tracking stock was issued by Liberty Media, which is controlled by media mogul John Malone. Some Berkshire followers believe the Liberty Sirius XM investment is managed by Ted Weschler, rather than CEO Warren Buffett.
Liberty Media and Sirius reached a deal in December that will combine the tracking stock with Sirius XM Holdings in what Liberty expects to be a tax-free exchange in which the tracking stock shareholders will get Sirius XM Holdings stock.
What’s Next: The appeal of the Liberty SiriusXM tracker is that it trades at about a 33% discount to the value of Liberty’s SiriusXM stake, Barron’s estimates. Bulls are betting the gap will close as the transaction approaches—it is due to close in the third quarter. If the gap closes, holders of the tracking stock could score some big gains.””
