What Happened?
Shares of satellite radio and media company Sirius XM (NASDAQ: SIRI) jumped 3.7% in the afternoon session after it announced a new integration with Vehlo, a software provider for auto service and repair shops, to offer trial subscriptions.
Through this partnership, auto service and repair businesses using Vehlo's software can provide their eligible customers with a complimentary three-month trial subscription to SiriusXM. The integration was made available for shops using the Tire Guru and Shop-Ware platforms, with another called Protractor expected to launch soon. This initiative gave the participating shops a way to add value for their customers at no extra cost, while expanding SiriusXM's potential subscriber base.
After the initial pop the shares cooled down to $22.35, up 3.4% from previous close.
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What Is The Market Telling Us
Sirius XM’s shares are quite volatile and have had 18 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 11 days ago when the stock dropped 4.6% on the news that worries over worsening trade relations with China were triggered by critical comments from President Donald Trump.
The President's comments, stating on social media that China has 'become very hostile,' injected significant volatility into the broader markets. This particularly affected the leisure industry, which is highly sensitive to economic sentiment and discretionary spending. Leisure stocks, which include companies in travel, entertainment, and hospitality, rely on consumers feeling confident enough to spend on non-essential goods and services. Trump targeted China's tightening controls on rare earth metals, which are vital components in many technology products from electric vehicles to defense systems. The president's tone and the suggestion of canceling a meeting with President Xi caused a rapid sell-off in the market.
Earlier in the week, China announced new export controls on the critical minerals. Beijing's Commerce Ministry stated that foreign suppliers now need government approval to export products containing certain rare-earth materials. These materials are essential for producing high-tech goods, including computer chips, electric vehicles, and defense technology. Analysts viewed the move as a strategic assertion of China's dominance in the global rare earth supply chain, particularly amid ongoing trade tensions. The prospect of escalating tariffs raises concerns about economic headwinds, which could lead to a slowdown in consumer spending. If consumers tighten their budgets in response to economic uncertainty, discretionary purchases are often the first to be cut, directly impacting the revenues of companies in this sector.
Sirius XM is up 1.1% since the beginning of the year, but at $22.35 per share, it is still trading 22.2% below its 52-week high of $28.74 from December 2024. Investors who bought $1,000 worth of Sirius XM’s shares 5 years ago would now be looking at an investment worth $381.36.
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