Volume Spike Investor

We’ve just seen a sudden surge of volume to the downside in both Sirius Satellite Radio (NASDAQ: SIRI) and XM Satellite Radio (NASDAQ: XMSR).  There are reports that the FCC commissioner who was trying to make strong concessions  on th Sirius/XM merger has withdrawn the offer that would have resulted in approval of the merger.  Frankly, the concessions he was seeking were too great even though we thought the company would capitulate and try to break some concession terms in 2 or 3 years.  Now there is a 2-2 vote for and against with 1 vote remaining.

Sirius shares are down 2% at $2.33 on almost 10 million shares and XM shares are down 2.75% at $8.83 on 5.2 million shares as of 11:49 AM EST.

The good news here is that both stocks so far have held up and not broken under yesterday’s intra-day lows after the first NO vote came from an FCC commissioner.  The bad news is that the merger is essentially hanging in the balance of 1 vote.

Jon Ogg

July 23, 2008