If You Had Put $75 into Sirius XM Shareholdings Three Decades Ago, This Is Your Current Worth
Sirius XM's Rollercoaster Journey 🪄
Ever since its initial public offering (IPO) back in the 90s, Sirius XM Holdings (SIRI 0.14%) has been quite the rollercoaster ride for investors. After soaring in price by nearly 900% following its IPO, it plummeted during the dot-com burst, dipping below its IPO price. But then, the unthinkable happened - a multiyear revival!
Wanna know what a $75 investment in Sirius XM back then would be worth today? Buckle up, it's going to be a wild ride!
The Sirius XM Saga: From Darlings to Dippers
Few stocks have a history as colorful as Sirius XM. Over the years, this tech company has gone from tech darling to bankruptcy candidate, only to force a megamerger with its biggest competitor. With all the drama, you may be surprised that Sirius XM has yet to prove itself as a profitable long-term investment.
After 30 years, an investor who put $75 into the stock at its IPO, held on, and reinvested every dividend, would now have a holding worth...just $42 today. 🙁
But don't write off the stock just yet - one of the investing world's legends is betting big on a comeback!
The Oracle of Omaha Lays Down His Bet
In 2023, Warren Buffett's conglomerate scooped up shares of Sirius XM. Despite losing a pretty penny based on his initial investment, according to his SEC filings, Buffett still holds nearly one-third of all Sirius XM shares outstanding! And that's not all - Buffett's investment team has been buying more Sirius XM shares every month in December, hinting at their continued commitment to the stock.
So what's drawing in Buffett, the legendary investor? Let's dig a little deeper.
Cheap Stocks, Big Payoffs: Some Math Behind the Bet
Shares in Sirius XM are a bargain right now, trading for just 8 times earnings. And given its growth estimates for 2025, shares are even cheaper at less than 7 times forward earnings. While Sirius XM's subscriber base is steadily shrinking for now, the stock's discounted valuation and its solid cash flow generation make it an intriguing value play.
Buffett, known for his patience and value investing, sees this as an opportunity. If Sirius XM can turn things around, the payoff could be massive.
While Sirius XM hasn't been a reliable long-term investment thus far, the world's most successful investor sees a comeback on the horizon. So should you jump on the Sirius XM bandwagon or keep your money in the bank? Only time will tell!
Despite Buffett's significant investment in Sirius XM, the company's profitability as a long-term investment remains uncertain. With shares trading at a bargain price of 8 times earnings, investing in Sirius XM could offer a potential high return if the company manages to turn its fortunes around. In terms of finance and money, this investment opportunity involves weighing the risk of a failing tech giant against the potential reward of a successful revival.
