XM Radio on Speculation Radar
***Written By: Blain Reinkensmeyer Stock Forum ID: StockTrading101***
I have been watching XM Satellite Radio (XMSR) now for a while, following the news and company updates. What I have found interesting is the possibility of XM merging with Sirius (SIRI), or getting bought out by Sirius. Obviously, immediate thoughts include, “this would break laws” , “wouldn’t happen sorry” , amongst others. But, when I really look at it and think about it, XM is a good speculation play simply because they have yet to get the big “no”.
The biggest sign in my eyes that such a merger could occur is in the known understanding that the SEC has yet to rule it out. In fact, our SEC chairman was brought onto the news to discuss the possibility recently, and didn’t rule it out. Also, even with the heightened speculation surrounding the big company, the street has yet to hear either of them speak out against the news. This makes me think that there is still a strong possibility for something to happen.
XM is today trading at about $13.40, and I think it goes to $20 with a deal worked out between it and Sirius. Taking a small position in this range is a low risk play with a high ceiling of return.
