will this badly ? "" WARREN BUFFETT WATCH
 
Satellite radio exchange play slides underwater as bet increases

Berkshire Hathaway has been steadily adding this year to its positions in two tracking stocks (LSXMA and LSXMK) connected to Liberty Media's Sirius XM radio service.

 

In SEC filings tonight (Friday) three hours after the market close, it disclosed the purchases over the past three days of another 1.9 million shares for $50.1 million.

 

Combined with shares it bought on April 4 through April 8, it has spent $147.3 million so far this month and almost $1.2 billion since January 2.

 

The apparent goal: take advantage of a price differential in an upcoming reorganization that was announced in mid-December in which each tracking stock share will be exchanged for 8.4 shares of Sirius XM Holdings (SIRI).WARREN BUFFETT WATCH
 
Satellite radio exchange play slides underwater as bet increases

Berkshire Hathaway has been steadily adding this year to its positions in two tracking stocks (LSXMA and LSXMK) connected to Liberty Media's Sirius XM radio service.

 

The apparent goal: take advantage of a price differential in an upcoming reorganization that was announced in mid-December in which each tracking stock share will be exchanged for 8.4 shares of Sirius XM Holdings (SIRI).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."