Howard Stern’s Impractical Joker Routine Just Gave Sirius XM Investors an Existential Crisis

Howard Stern just reminded everyone he’s still the most important thing keeping Sirius XM alive… by faking his own exit.

If you’re a Sirius XM investor… first of all, my condolences… but there’s a good chance you almost peed your pants on your way to work. Listeners tuned in this morning expecting Stern, only to hear Andy Cohen on the mic announcing he was taking over the show. Not surprisingly, Media outlets went nuts, Sirius stock dipped 4%, and for a hot second investors thought the only good thing they could point to had walked. Then Stern popped on laughing, admitting it was all a prank.

While it was all fun and games, not kid ourselves… Howard knew exactly what he was doing. This wasn’t some harmless radio stunt for sh*ts and giggles, it was a negotiating tactic dressed up as theater. His $100 million-a-year contract from 2020 is coming up on expiration, and the rumor mill says Sirius isn’t eager to stroke another nine-figure check. So what does Stern do? Pulls a prank that sends headlines flying, spooks investors, and reminds everyone in the building that Sirius without Stern is no more than an empty satellite spinning in orbit. The message was loud and clear: you need me a hell of a lot more than I need you.

(Source: Marketwatch)

The man has a point. When Stern jumped ship from terrestrial radio in 2006, Sirius was crawling along with 3.3 million subs while XM had 6 million. His move not only shifted the balance of power, it forced the merger that created today’s media powerhouse. Nearly two decades later, he’s still the main character. On the flipside, the scary part is that he’s still the only main character.

Now, let’s look at the numbers, because that’s where the shine wears off. Sirius still spits out about $1 billion in annual free cash flow, trades at less than 7x forward earnings, and dangles a dividend north of 5%. On paper, that’s pretty sexy. But revenue has been grinding lower for years, churn sits at 1.5%, and if we’re all being honest… no 24-year-old is paying $15 a month for satellite radio when Spotify, Apple Music, and 14 different podcasts are free. The company’s survival strategy is simply hoping boomers forget their password long enough to keep the billing going. It will work for a few more years, but the clock is ticking.

And somehow, Warren Buffett can’t quit it. Berkshire Hathaway now owns more than a third of Sirius X… which is hilarious when you remember last year’s 1-for-10 reverse split turned off every Robinhood cowboy who thought they were riding a meme stock. But Buffett’s not here for fireworks. He’s here for boring, dependable cash flow. Sirius is never going to have “Stonk” memes made about it, it’s a toll booth. Predictable revenue, sticky subscribers, monopoly niche… it’s like the power company, except instead of electricity you’re paying to hear Howard Stern dive deep with Billy Joel live on air.

Buffett loves that kind of boring. If a urinal stock suddenly started spitting out a steady 5% dividend, you can bet he’d be first in line there too.

So everybody take a breath. Stern isn’t walking out the door (yet), Sirius XM isn’t suddenly “so back,” and Buffett clearly thinks Wall Street’s punished this stock harder than it deserves. For investors, the menu’s pretty simple: clip the dividend and treat it like a slow-and-steady paycheck… or keep living in a fantasy where Sirius magically rewinds to the early-2000s “disruptor” narrative. (Unfortunately, that era died the second Spotify put an aux cord in every kid’s pocket.)

And if the Sirius board is really losing sleep over life after Stern? Maybe stop overthinking it and just pull the only move left. It’s time to back up the Brinks truck, cut Joe Rogan a billion-dollar equity check, and pray he brings the UFC crowd with him.

At the time of publishing this article, Stocks.News holds positions in Sirius XM, Spotify, Robinhood, and Apple as mentioned in the article.