Wednesday, November 08, 2006

An Item of Note For XM Shareholders

November 8, 2006

Setting aside the conference call for a moment, there was news today that may indicate why XM had had so much trouble moving up over the past month.

Deleware Mangaement, XM's second largest shareholder filed a form 13G showing that they have divested themselves of 22,000,000 shares, and now owns 41,000 shares of XM Satellite Radio.

This represents a big player in XM selling off a large number of shares. Those shares hitting the market represented large downward pressure for the equity. The silver lining.....

Now that that the Deleware Management selling pressure is gone, the stock can move more naturally provided there are not other big players that begin to sell as well.

There are positives and negatives to having a large number of shares held by institutions. When these big boys are buying all is good.....when they are selling, things can get ugly.

For the moment it looks as if there is not a huge selling pressure. If you are invested in SDARS, it is good to follow the institutional activity at least to some degree. If you are in XM, it is good to know that a big player that had decided to sell appears to be done selling.