At the beginning of the year, it looked like a good deal. SIRI was trading at $5.49 per share, putting the exchange value at more than $46 for a tracking share then valued at less than $30.
Since then, however, SIRI has dropped by more than 41% to close at $3.21 today.
In the last week, based on SIRI’s closing price each day, the value of the shares Berkshire would receive for the tracking stock shares it has bought this year has dropped below what it paid for them.
As of tonight, Berkshire has paid $1.18 billion this year for 40.3 million tracking shares that would, at SIRI’s current price, be exchanged for 338.6 million shares valued at $1.09 billion, for a loss of around $90 million.
It’s also lost money, on paper, just with the tracking shares it has bought this year. Based on tonight’s close, they are valued at just over $1.0 billion.
Things could change before the exchange takes place. It’s expected to happen in this year’s third quarter, although it could come earlier.
Berkshire may be playing another game altogether, but right now it looks like the money it has spent adding to its LSXMA and LSXMK positions this year isn’t going to be a winning investment.
