Stop Trading!: FCC to Clear XM-Sirius Deal
Finally, it appears the Federal Communications Commission will vote in favor an XM-Sirius Satellite Radio merger. It only took one year and 156 days.
Not that Cramer was counting. It’s important to note, however, that Exxon and Mobil came together in 1999 after about a year of FCC review, and that was a mammoth $81 billion deal between two giant oil companies.
Still, “This is going to be a powerhouse,” Cramer said of XM and Sirius during Wednesday’s Stop Trading!.
The two firms will have to pay a combined $20 million fine, and they’ll miss the 2008-2009 automobile season, but Cramer was still positive about the news. He recommended the stocks as a possible speculation play.
But “be careful,” Cramer said. “They have to refinance. The common stock’s going to be diluted.”
Cramer also recommended buying XTO Energy’s 26 million-share secondary offering, planned for Wednesday, if only as a trade. He said XTO stock is too cheap.
Hudson City Bancorp seems to have sidestepped much of the loan trouble other banks are suffering. But what can you expect from a lender that’s averaging 39% for down payments from its clients.
“He's a good lender,” Cramer said of CEO Ronald Hermance Jr., “and everyone else forgot how to do that.”
Lastly, Cramer reiterated his call on Costco. As a service to its customers, he said, the discount retailer was trying not to pass on its supplier costs. Now the company’s expecting to miss analysts’ profit forecasts. While Cramer admitted the stock wasn’t perfect, Costco is “American’s greatest retailer, and it’s very rarely put on sale.”
“Let's think a little bit long term,” he said, “and begin to buy Costco.”
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