Pandora Media Inc (NYSE:P) may benefit especially in terms of acquisition based on the fact that billionaire businessman Warren Buffet owns part of Liberty Sirius XM Group (NASDAQ:LSXMA).
Pandora’s shares gained by 16 cents which is equivalent to 1 percent at $13.10 after a report from Robert Routh of FBN Securities. The report speculated that the internet radio company might be acquired by Liberty Media and Sirius XM. Routh’s claim is hugely based on the fact that Buffet has invested in both Sirius XM and Liberty.
Clearly, Berkshire is leveraged to the upside in SIRI based on these positions,” Routh stated.
Berkshire after a bigger piece of the pie
Routh believes that Buffet’s firm Berkshire Hathaway Inc. (NYSE:BRK.A) considers Sirius XM and Liberty as hot Nasdaq stock picks. This is because Berkshire increased its stake in the two firms in Q4 2016. This suggests that there is a lot of upside potential. The analyst also noted that Sirius’s stock value is higher than that of Liberty.
Pandora would be a great addition to the two
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Top Nasdaq stock analysts believe that the acquisition of Pandora by Sirius XM and Liberty would be a smart move for the firms because it would strengthen and diversify their position. Rumors of a Pandora/Sirius XM merger started making headlines in 2016 after Greg Maffei of Liberty brought up the idea of tapping into the music streaming industry through Pandora. Routh believes that Liberty and Sirius would be at a huge advantage in terms of equity if they decided to acquire Pandora.
“LSXM could look to buy Pandora using its equity as deal currency IF Pandora’s Board would agree to value LSXM at its fair value in any such deal of $48.59 rather than at its market value,” Routh pointed out.
He added that the deal looks very attractive in theory though it is not clear whether it will materialize in the future.
Pandora stock closed the latest trading session at $13.58.
