Appeals Court to Shock-Jock Howard Stern: Sirius XM Treated You Fairly
Howard Stern’s highly publicized move to a Sirius XM Radio (NASDAQ:SIRI) satellite station in 2006 was a huge winner for both parties. In fact, according to Thursday’s ruling by a New York appeals court, there are no more stock bonuses on the way for Stern. Though he hoped to bring back a lawsuit claiming he’s owed more, the judge has called the matter a closed deal.
Stern’s claim stems from Sirius’s 2008 purchase of XM Radio, which grew the number of subscribers considerably for the satellite company. Stern suggested through his attorneys that the new group of subscribers (via XM) should be counted in the formula used for awarding stock bonuses. According to the appellate court ruling, that possibility was explicitly addressed in Stern’s original contract and, therefore, there was no grounds to renew the appeal or award Stern any additional bonus.
Sirius has been in the news a great deal in recent months, as analysts debate the future of the stock and car sales continue to surge at key partners such as Ford (NYSE:F), General Motors (NYSE:GM), and Toyota (NYSE:TM). Since the majority of new cars are enabled with Sirius satellite technology, many are expecting a boost for Sirius in the period ahead. As of 2:15 P.M. Friday, Sirius was trading at $3.13, down $0.02 for the day and lingering below its 2013 high of $3.25…
Nonetheless, many investors remain bullish on Sirius, with favorable earnings reports and a rise in insider purchases. Liberty Media (NASDAQ:LMCA), which holds a controlling interest in Sirius, recently announced its CEO Greg Maffei will replace Eddy Hartenstein as the satellite radio company’s chairman. That news is not shocking to most observers, who anticipated the media giant would continue to increase its power over Sirius’s moves.
Investors hoping Sirius would make a move in expanding its telematics reach might have been disappointed when a Citi Research analyst shot down the premise. However, Citi’s Jason Basinet declared that investors’ lack of confidence in Sirius on the telematics front was unwarranted.
He cited a relationship with Nissan as an indicator Sirius was positioned well on this front. Overall, bullish sentiments for Sirius reign, though recent Liberty Media insider purchases likely signify mere attempts to retain majority control.
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