This Week in Sirius XM Radio
Things never get dull for the country's lone satellite-radio provider. Shares of Sirius XM Radio moved slightly higher on the week, climbing 0.9% to hit $3.38. The media darling's gain wasn't as strong as the 2.2% Nasdaq pop, but there's no point in complaining about a positive run.
There was more going on beyond the share-price gyrations, though. Auto sales for June clocked in strong, and that's naturally good news for Sirius XM down the line. Majority stakeholder Liberty Media's push for Time Warner Cable may happen with Sirius XM playing a significant role. Weeks after striking a deal to broaden Sirius XM's reach, Ford expanded the global reach of its SYNC AppLink platform with a deal in China.
Let's take a closer look.
Car sales are revving up
It was a good month for new-car sales, and that's huge, since the sale of new cars with factory-installed satellite receivers is the lifeblood of new subscriptions at Sirius XM. Ford's U.S. sales soared 13% in June, just above the 12% that upbeat analysts were targeting.
Sales were strong for the company's SUVs and flagship pickup trucks, but a major driver has been the smaller fuel-efficient cars that drivers are turning to as a way to save on gasoline consumption. This is an important move for Sirius XM, because it doesn't want to lose subscribers who give up driving as a way to save on high fuel prices. Smaller, gas-sipping cars keep folks on the road and subscribing to Sirius.
It's no secret that Liberty Media mastermind John Malone has his sights set on Time Warner Cable, and we know he isn't afraid to shake his assets to make things happen.
There don't seem to be any fears that Malone will dump Liberty Media's roughly 51% stake in Sirius XM at the moment, but The Wall Street Journal argues that Liberty Media's valuable stake in the satellite-radio giant may come into play here. The financial publication's "Heard on the Street" column on Wednesday suggests that Liberty Media could potentially borrow against its stake in Sirius XM to consolidate Time Warner Cable into its existing cable television assets.
Either way, this is a matter that Sirius XM investors will want to keep an eye on in the coming months.
Ford steers east
Ford became the first automaker to make Sirius XM's streaming offerings easier to use, with last month's announcement that Sirius XM's MySXM and SiriusXM On Demand will work with Ford's SYNC AppLink. Now Ford is turning its attention to the world's largest market, teaming up with China's leading search engine and third largest wireless carrier to beef up the platform's presence in China.
The move naturally doesn't have any immediate impact on Sirius XM, which is currently restricted to the North American reach of its satellites. However, as Sirius XM expands its streaming service, there is little stopping it from becoming a global force. Staying chummy with Ford will come in handy if SYNC AppLink evolves into a popular platform for Chinese developers.
A Sirius future
It was an interesting week for Sirius XM. The new week isn't likely to be dull.
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Longtime Fool contributor Rick Munarriz owns shares of Ford and Liberty Media. The Motley Fool recommends and owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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