In a head-spinning series of transactions, the investment heavyweight Warren Buffett has doubled down on an unconventional media bet – dropping over $350 million to bulk up his firm’s stake in Liberty SiriusXM, a tracking stock shadowing satellite radio giant SiriusXM.
Securities filings reveal Buffett’s Berkshire Hathaway has gone on a veritable buying binge of Liberty’s shares over the past week. The splurge included scooping up 8.9 million of the Series C shares at around $258 million, as well as 3.8 million of the voting Series A shares for north of $110 million.
Thisagt0 puts Buffett’s total ownership at a cosmic 30% of Liberty SiriusXM’s outstanding equity. While the non-voting C shares offer no say in corporate decisions, the combined holding translates to Buffett and co. wielding formidable clout over the firm’s strategic direction.
But Liberty itself is something of an odd duck. It doesn’t run any operating business per se – instead deriving value from its gargantuan 80% ownership stake in SiriusXM, the subscription satellite radio service beaming down to millions of cars and homes across North America.
So what’s the hulking 92-year-old investment guru’s calculus here? Could be Buffett’s spidey senses are tingling about unlocked potential within the satellite radio sphere – perhaps through innovative content, expanded bundling, or emerging technologies down the pike.
“This is classic Buffett opportunism at work,” posits Erik Gordon, a professor at the University of Michigan’s business school. “He’s decided the market is underestimating SiriusXM’s long-term trajectory and growth avenues. The Liberty structure just gave him a roundabout way to double down at a discount.”
The market seemed to endorse Buffett’s conviction, at least initially. In the days following his purchases, Liberty SiriusXM’s stock prices jumped over 3%, while the core SiriusXM shares have tanked nearly 30% so far this year amid broader economic turbulence.
For the investing icon, whose canny bets have minted him a $100 billion-plus personal fortune, the bold Liberty gambit marks his latest big swing at shaping Berkshire Hathaway’s equity portfolio. And it underscores his unflagging appetite for unconventional plays – if the underlying business case aligns with his value tenets.
Still, it all adds more grist to the perpetual chatter about succession plans at Berkshire as Buffett’s investing tenure inevitably winds down. The octogenarian has identified a few potential chief investment officer candidates internally. But no one can quite replicate his market-defying alchemy and brand power.
Wall Street will be watching intently to see if he keeps doubling down on his SiriusXM courtship. Because when an investing maverick of Buffett’s stature places a multi-hundred-million-dollar bet, you’d best believe he thinks he’s onto something big.
