Things never get dull for the country’s lone satellite-radio provider. Shares of Sirius XM Radio Inc (NASDAQ:SIRI) slipped this week, falling 3.2% to close at $3.58. The media darling’s drop was worse than the Nasdaq’s 1.9% decline on the week.
There was more going on beyond the share-price gyrations, though. Sirius XM Radio Inc (NASDAQ:SIRI) found itself having to tackle two legal matters, and Nokia Corporation (ADR) (NYSE:NOK) took another step in the telematics market.
Let’s take a closer look.
I’ll see you in court
The week kicked off with music royalty collector SoundExchange going after Sirius XM for the way it calculates the gross revenue it uses in determining how much it has to pay. The fast-growing media company paid 8% of its related revenue last year and is coughing up 9% this year. That figure will balloon to 11% by 2017.
The definition of “gross” revenue is the key here. What’s the value of the non-music content Sirius XM Radio Inc (NASDAQ:SIRI) plays? How do you allocate the different pricing plans to what the music makers deserve? What about the pre-1972 recordings that are covered? There are a lot of gray areas here, but SoundExchange is seeking compensatory damages that could be more than $100 million.
Another potential legal battle is starting to take shape, as some shareholders are trying to get a Delaware Chancery Court judge to explore the circumstances behind the 2009 deal that granted Liberty Media a 40% preferred-share stake in Sirius XM Radio Inc (NASDAQ:SIRI). That case faces a higher hurdle to clear, but it bears watching.
The Finnish line
Even before Sirius XM agreed to pay $530 million for Agero’s connected vehicle services business two weeks ago, the satellite-radio star has been staking a bigger role in the promising telematics market. It’s for that reason that shareholders now need to keep an eye on developments in that field.
On that front, Nokia Corporation (ADR) (NYSE:NOK) introduced Here Auto on Friday. Nokia Corporation (ADR) (NYSE:NOK) may seem to be struggling to regain its former glory in mobile, but that’s no reason to take Here Auto lightly. When it acquired NAVTEQ six years ago, Nokia Corporation (ADR) (NYSE:NOK) became the top dog in automotive mapping data. Here Auto, a connected car system, is a logical extension.
Nokia Corporation (ADR) (NYSE:NOK) and Sirius XM Radio Inc (NASDAQ:SIRI) make odd enemies, and they’ll be butting heads here sooner rather than later.
A Sirius future
It was an interesting week for Sirius XM Radio Inc (NASDAQ:SIRI). The new week isn’t likely to be dull.
The article This Week in Sirius XM Radio originally appeared on Fool.com and is written by Rick Munarriz.
Longtime Fool contributor Rick Munarriz and The Motley Fool have no position in any of the stocks mentioned.
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