Would ya look at that? SiriusXM (SIRI) just pulled off something it hasn’t done in a while: It made investors happy. The stock has surged 16.44% over the past five days, which is a breath of fresh air for anyone who’s been watching this stock sink like a stone. To give you a sense of how much this rally stands out, SiriusXM shares are still down 51% year-to-date and off another 44% from last year.

(Source: Giphy) 

So, what gives? Why the sudden shift from red to green? You can thank one guy for that: Warren Buffett, aka the Oracle of Omaha. Yup, Grandpa Buffett decided it’s high time to be one of the cool kids and double down on SiriusXM. 

(Source: Hollywood Reporter) 

In short, Buffett’s Berkshire Hathaway (BRK.A) just scooped up 3.6 million more shares of SiriusXM for around $87 million. This move brings Berkshire’s stake in the satellite radio giant to a hefty 32%. And like always, when Buffett buys, Wall Street listens. 

Now with that said, this isn’t exactly a new love affair. Berkshire’s been slowly courting SiriusXM for a while, and this latest buy comes after Liberty Media—headed by billionaire John Malone—finalized a deal to merge its tracking stock with SiriusXM. 

(Source: CNBC) 

It’s all part of Malone’s media empire shuffle, which, side note, also included spinning off the Atlanta Braves into its own publicly traded company. (And yes, Buffett grabbed a piece of that action too.) But before you degenerates start piling in just because Warren told you to jump off a cliff, let’s take a closer look at what Buffett’s betting on here. Because while SiriusXM’s stock might’ve gotten a short-term boost, the long-term outlook is about as appealing as the 2014 Cadillac XTS he purchased with hail damage.

(Source: Benzinga) 

You see, SiriusXM isn’t exactly riding high these days. In fact, the company’s been bleeding subscribers—173,000 lost in Q2 2024 alone. Which is worse from the 130,000 drop the year before. Ooooof. 

(Source: Billboard) 

Their revenue? Not great either. It slid 3% year-over-year in Q2, landing at $2.18 billion. And with a growing $10 billion debt load hanging over its head, the road to recovery looks steep. It doesn’t help that SiriusXM’s bread and butter—satellite radio—is mainly used in cars, and the base of subscribers is aging. JPMorgan analyst Sebastiano Petti flat-out reopened coverage of SiriusXM with an underweight rating, citing concerns about shrinking demographics and the company’s ability to pivot.

So given all of this, why is Buffett still bullish on SiriusXM despite all the red flags? It could be that he believes in the company’s stronghold on the U.S. audio market, thanks to its satellite radio and Pandora platforms. Or maybe he’s just a fan of Siriusly Sinatra (no, seriously—SiriusXM Chairman Greg Maffei once revealed that Buffett listens to the Sinatra station while cruising in his Cadillac).

But let’s not kid ourselves: Even with Buffett in their corner, SiriusXM has some serious heavy lifting to do. The company’s leadership, including CEO Jennifer Witz, has been talking a big game about this “new phase” after spinning off from Liberty Media. 

(Source: Giphy) 

But actions speak louder than words, and all eyes will be on their earnings report at the end of October to see if they can actually back it up. For now, investors are in wait-and-see mode. Will Buffett’s bet pay off, or is SiriusXM destined to keep circling the drain? Only time will tell.

In the meantime, for you SiriusXM investors, I hope this works out for you… I really do. But look at reality, unless Buffett is relying on his insider information legendary crystal ball, I wouldn’t hold my breath on any more massive uptrends going forward. 

As always, stay safe and stay frosty, friends! Until next time… 

P.S. Are you ready?! We are about to drop our next explosive alert very, very soon… so make sure you click here asap before this stock starts moving! 

Stocks.News doesn’t hold any positions in companies mentioned in the article.