Yesterday SIRI and XMSR had big drops around 3pm when reps John Conyers(D) and Steve Chabot(R) sent a letter to Attorney General Michael Mukasey not to rush approval of the merger. They feared that the assistant Attorney General might sign off on the deal even if there were objections from department staff. It appeared the congressmen, both friends with the NAB, were trying to stall the merger and hopefully get more politicos involved.

According to an AP article today, Stifel, Nicolaus & Co. analyst Blair Levin believes that the merger will be a close call but will get the green light anyway. Either way, the letter will not hold any weight with the Department of Justice, says Levin.

Keep up with the latest merger talks in our Merger Mania forum.

According to a report on 24/7 Wall St, SIRI short selling has increased by 14.4 million shares in the second half of November, and stands at 113.5 million shares as of 11/30, now standing as the third highest short interest on the NASDAQ, and eighth overall. XM’s short interest is up 9%, and stands at 21.9 million shares.

The increase is likely due to the pending merger. More people feel confident that the merger will not be approved, and hope that will drive the stock price down dramatically.

For those who don’t know what short-selling is, it is when you sell a stock without owning any shares, hoping it will go down. You then buy the stock back, hopefully at a lower value. It is basically ’sell high, buy low’.

So did you short SIRI or XMSR, or do you own some shares, thinking the merger will be approved?

Although Sirius’ own Mel Karmazin has been the public face of the merger, today’s “Saturday Interview” at the New York Times features XM’s Chairman, Gary Parsons, and President and acting CEO Nate Davis on the topic of the merger.  There is some interesting bits in this short article.

http://www.nytimes.com/2007/09/15/business/15interview.html?_r=1&ref=business&oref=slogin

My favorite line came from Mr. Parsons about the NAB’s opposition. He said, “The most extraordinary thing has been the visceral nature with which the N.A.B. jihad has progressed against the merger.”  He certainly isn’t one to hide his true feelings!

They also deal (somewhat superficially) with channel availability and pricing, post merger, with Davis saying, “You will be able to pick the channels you want, all at various prices. That’s not something we can do if we do not merge. “[Emphasis mine]

Overall, a good read.

Jim Cramer from the CNBC show Mad Money was interviewed by thestreet TV and here’s a quote from the interview:

“If you look at the economics of this Sirius-XM deal,
My god you go from being unprofitable to profitable like that “

Check out the video here, the Sirius-XM discussion starts at about 2:04 into the video.

Video - Cramer Interview

According to Wikipedia, In 2007, NewsBios.com named him one of the 100 most influential business journalists in the United States.

Do your own research before investing.

RBC Capital analyst David Bank has told clients to expect a decision from the Department of Justice within 30 days and that the deal is more likely to receive their approval than not. This isn’t the final decision as the FCC will also need to rule, but given the announcement of tiered pricing plans which the current FCC chairman favors, it is unlikely they will vote contrary to the DOJ’s decision.

The Stock is reacting positively to this breaking news:

It’s no secret that Sirius and XM have been getting a fairly impressive amount of support for the proposed merger with more the 4300 individuals and 30 organizations, and now they can add former FCC chairman Mark Fowler to the list. Fowler was FCC chairman during the Reagan administration and has the distinction of holding that post longer than any other person in history of the FCC. For this reason his opinion would naturally have more influence than the average supporter.

It’s starting to feel that some momentum is building in favor of the merger, and the stock has been rewarded by rising over 8% over the last 3 trading days. Sirius and XM expect the merger question to be settled by the end of the year.

(more…)

Source: The Marley Group

Already leading the satellite radio industry in net subscriber additions for the past four quarters, Sirius Internet Radio should help bolster additions in the all important retail sales category, which has been dominated by Sirius since the signing of Howard Stern. It is reasonably optimistic to believe that this service could yield between 200,000 and 500,000 subscriber additions by the end of 2007. With a monthly fee of $12.95, that would translate to an additional $31,000,000 to $77,000,000 in annual subscription revenue.

200,000 subs from now until the end of 2007 seems realistic. Particularly if SIRIUS continues to add value, such as ways to stream to other devices in your home, and niche channels not available over the satellite network.

Read the full article.

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