On Monday, Chairman Martin of the FCC endorsed the Sirius/XM merger, sending the stock price up, but not by much.
The stock then traded down over the next couple of days, low-lighted on Thursday when a Goldman Sachs analyst lowered his price targets for both companies.
Ironically enough, the reasons that the analyst gave for lowering his price targets are the same reasons that Sirius and XM are using to argue their case that they are not creating a monopoly by merging; competition with MP3 players, iPods and other electronic devices.
One thing I’ve learned over the course of my investing hobby is not to trust these analysts. Their job isn’t to help out the little guy, it’s to help out the big boys. Way more often than not, I’ve bought when the analysts were negative on a stock and then made out pretty good later on down the road when analysts finally upgraded, but by then it was too late to get in cheap for all of those that sold or stayed away because the analyst was negative. And you know these guys are buying when they go negative, they shake out the weak, scare away the little people, and load up on their shares before they then upgrade and make a nice profit off their previous downgrade.
Manipulation, if not pure crookedness.
You know Goldman’s is buying today with the SIRI stock trading down around two bucks, just like everyone else with spare cash who’s been watching this stock awaiting news on the merger, and they may have downgraded the stock so they or their hedge-fund buddies could cover a huge short position. Of course, this is all just VFC’s humble opinion.
One thing I am very confident on, is buying at these prices will ensure VFC nice gains in the future, whether it be the very near future with a positive decision on the merger, or in the longer-term future where real growth from SatRad occurs, whether it be by subscriber growth, advertising growth or cutting costs.
In all actuality, nothing changes right now, except that we have a great buying opportunity and thanks can go out to Goldman Sachs for that, but that great buying opportunity comes, once again, at the hands of some shady business.
Every day that goes by, and a whole lotta them have gone by since the merger was announced, is a day closer to the FCC’s decision on whether or not to approve the merger. Today’s downgrade doesn’t have any influence on that decision.
VFC likes doing things opposite of what the analysts recommend, there’s more money to be made that way. By the time Goldmans upgrades SIRI or XMSR again it’ll be trading double or triple where it’s at now.
It’s a shady business, this stock market.