Things never get dull for the country's lone satellite-radio provider. Shares of Sirius XM Radio hit a multiyear high during the week before shedding 3.1% of their value to close out the week at $3.70. The media darling's slide was worse than the Nasdaq's 2.2% decline on the week.
There was more going on beyond the share-price gyrations, though. Sirius XM also announced an intriguing acquisition that makes it a bigger player in telematics, and a Goldman Sachs upgrade sent Pandora to a new 52-week high, as the streaming music bellwether gears up to post its latest quarterly results.
Let's take a closer look.
Sirius XM is a road hog
With improving cash flows and billions in net operating losses that it can use to offset future taxable profits, it was just a matter of time before Sirius XM made a material acquisition. This week it announced that it will pay $530 million for Agero's connected-vehicle-services business.
That's a lot of money to pay, but the deal will make Sirius XM a bigger player in telematics. The satellite-radio provider has decided that the best way to increase its revenue is to expand across the dashboard to other premium services. Te deal will find Sirius XM building on its relationships with many leading auto manufacturers, and ideally increasing the amount of revenue it can generate from each driver.
Sirius XM hit $3.85 on Monday, and again on Tuesday. You have to go all the way back to March 2008 to find the last time the stock traded this high.
The highs didn't stick, though, as Sirius XM succumbed to the selling on the market. Falling all the way down to its $3.70 close will make it that much harder to revisit these five-year highs.
Cracking open Pandora's box
Goldman Sachs analyst Heath Terry upgraded Pandora's stock rating from "neutral" to "buy" on Friday, slapping an ambitious $27 price target on the shares.
He now sees Pandora earning $0.20 a share this year, well ahead of the $0.02 he was originally targeting and the $0.04 that currently stands as Wall Street's consensus. Terry's perspective has changed as Pandora's revenue has started to grow faster than its content costs.
Pandora reports quarterly results on Thursday, so we'll see whether Terry's upgrade was either timely or unfortunate.
A Sirius future
It was an interesting week for Sirius XM. The new week isn't likely to be dull.
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