Por que a Berkshire já tem 37% da SiriusXM

Berkshire Hathaway recently announced the acquisition of an additional 1 million shares in SiriusXM, a satellite radio and streaming platform with over 30 million subscribers in the United States. This brings the company's stake in SiriusXM to 37%, valued at $4 billion. The investment, which began in 2017 and now constitutes more than 1% of the Berkshire Hathaway portfolio, has long been a mystery to many investors.

Despite SiriusXM facing increasing competition from streaming platforms, the company has recently turned its fortunes around. Since 2024, the stock has seen an 8% increase following the announcement of Berkshire's stake. Over the past 12 months, the share price has risen by 53%, though it remains down 47% over the past five years.

SiriusXM was formed in 2008 through the merger of satellite radio companies Sirius and XM, initially providing service through portable devices or installed in cars or computers. Today, it also functions via app or any device with internet access. Initially dominant, the M&A process was costly, and regulators took over a year to approve it, hampered by the subprime crisis and almost leading to bankruptcy.

Saved by a $3.5 billion loan from Liberty Media, the current majority owner of Formula 1, SiriusXM was initially the company's largest shareholder before being taken over and controlled by Liberty in 2017. In 2024, when the companies separated, Berkshire became a direct investor in the radio platform. Market speculation suggests that Ted Wechsler, Berkshire's main stockpicker, played a role in the decision to buy, given his background and close relationship with SiriusXM management.

Since the sale to Berkshire, SiriusXM has been working on a restructuring plan to return to growth, as competition increased, the company became leveraged, and aging subscribers continue to use services primarily in their cars. Efforts, including cost cuts, pricing changes, and technological and podcast investments, have already expanded the user base.

Meanwhile, the market awaited a turnaround. Despite this, Deutsche Bank believes SiriusXM's biggest asset lies in its advertising partnerships with Amazon and YouTube, which could generate $2 billion in revenue by 2029. Additionally, the company is investing in content, currently offering hundreds of music, sports, news, and entertainment channels, including exclusive licensing of NBA games and CNN programming as themed 24/7 channels, as well as exclusive contracts with celebrities like Howard Stern and Conan O'Brien.

In 2019, SiriusXM paid $3.5 billion for Pandora, a music streaming app that creates playlists based on users' musical tastes, further diversifying its offerings. With 33 million subscribers, SiriusXM remains its primary revenue source, while Pandora has 6 million subscribers but also offers a free, ad-supported plan. SiriusXM is valued at $11.2 billion on the stock market.