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Blue Ridge Capital increases holding in SiriusXM

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Dec. 4 2020, Updated 10:52 a.m. ET

Blue Ridge Capital and SiriusXM

Blue Ridge Capital reduced its holdings in Sirius XM (SIRI) as disclosed in the 13F filings of the hedge fund. The fund added 17,120,000 shares to its existing holdings in SIRI during 3Q14 to own 54,895,000 shares.

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Overview of SiriusXM

SiriusXM Holdings is an American broadcasting company that provides two satellite radio services operating in the US: Sirius and XM Satellite Radio. The company also has a Canadian subsidiary called Sirius XM Canada, an affiliate company that provides Sirius and XM service in Canada.

SiriusXM offers numerous services, notably:

  • music
  • sports
  • entertainment
  • comedy
  • talk
  • news
  • traffic
  • weather channels
  • infotainment

SiriusXM’s services are available in the US on a subscription fee basis through its two proprietary satellite radio systems.

SiriusXM’s primary source of revenue is subscription fees. Most of its customers subscribe on an annual, semi-annual, quarterly, or monthly basis. The company also generates revenue from activation and other fees, the sale of advertising on select non-music channels, the direct sale of satellite radios and accessories, and other ancillary services such as weather, traffic, data, and Backseat TV services. Through 2014, SiriusXM has 25.6 million subscribers.

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SiriusXM’s robust performance in 3Q14

Sirius XM had an outstanding third quarter in 2014, with the total reported revenues of $4.15 billion and a healthy cash flow of $1.12 billion. The third quarter witnessed an all-time high of 26.7 million paid subscribers. The car penetration rate for SIRI in the third quarter was up dramatically by 71.5%, which is an increase of around 3% when compared to last year.

In addition to this, SIRI also has over 14,000 auto dealers (up from 11,000 last year) that provide SiriusXM trailers to their non-certified customers.

Focus on developing content

The most important aspect for growth and development of the business is the level of content it generates. SIRI added a new stream of channels, hosts, and shows this quarter. SiriusXM is one of the market leaders in the audio entertainment business.

The third quarter of 2014 was by far the best for SiriusXM in terms of market penetration as well as increasing revenues.

Blue Ridge’s notable positions traded in 3Q14

Blue Ridge Capital added a new position Alibaba Group Holding (BABA) and increased its position in Yandex (YNDX), LinkedIn (LNKD), and Sirius XM. Its top sell was Citigroup (C). Top decreased positions were in American International Group (AIG), Walgreen (WAG), and Cheniere Energy (LNG).

The next article will focus on Blue Ridge Capital’s rationale for selling shares in Citigroup.

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