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Fast Money

XM & Sirius: Making Music Together?


The boss at XM Satellite (XMSR) tells Fast Money if he thinks the highly-anticipated deal with Sirius (SIRI) is still on as XM shareholders prepare to vote on the merger next month.

Joining the desk via satellite from Washington D.C., Gary Parsons expresses faith that the merger will happen. The regulatory process is long and arduous, involving both the Department of Justice and the Federal Communications Commission. The merger has to pass an antitrust test at the DoJ and a public interest test at the FCC, Parsons says. He is still hopeful the deal will be completed by the end of the year.

XM & Sirius

The momentum is with the merger, he says. Investors and those in the media have realized a combined XM/Sirius company would not violate antitrust laws, according to Parsons, as the real competition isn’t with each other but instead with the terrestrial radio companies. Combined, XM and Sirius could compete with those millions of listeners much more effectively. That is what the National Association of Broadcasters has realized – and why it is so “petrified” of the deal going through, Parsons says.

The value to shareholders is also at the crux of the merger. Parsons says the deal would effectively translate to shareholders as “one plus one equals three.” The profitability and cash flow for both companies would be on the fast track if they were combined, he says.

XM & Sirius: Making Music Together?

Jeff Macke recommends a trade in Sirius. He thinks the merger will get finalized – it’s “lunacy” to call this a monopoly, he says – but the question crucial for shareholders would be whether it gets done in time for Christmas in order to get sales up.

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Trader disclosure: On Oct 10, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders Macke Owns (DIS), (INTC); Pete Najarian Owns (LXK), (ZMH), (VCLK), (GOOG); Finerman's Firm And Finerman Own (TEL), (TYC); Finerman's Firm Owns (COP), (DAI), (MSFT), (NVT), (TGT), (WMT), (YHOO); Finerman's Firm Owns S&P 500 Puts; Finerman's Firm Owns Russell 2000 Puts; Seygem Asset Management Owns (AA), (F), (GLD), (IRBT), (MSFT), (SBUX), (SSL); Seygem Asset Management Is Short (TKC); Lukoil Trades Over The Counter In The U.S. But Trades On The Exchange In London; Jon Najarian Owns (GOOG), (YHOO), (BHI)