SIRI pps post merger will be largely influenced by the analysts re-crunching their numbers for the new company. It's very likely we will see a pop to possibly $5 but the pps will correct down after the day traders sell and wait for upgrades and new guidance from the analysts.
Bushman expects JJ to low ball once again with a 1-year target around $3.50 while the rest of the analysts issue price targets in the $4.50 to $6.00 range. Further upgrades can be expected once SIRI begins to show a profit.
Bushman expects JJ to low ball once again with a 1-year target around $3.50.... Maybe this is why JJ is sticking to his 3.50 target. Siri MCAP 5.19, Xmsr MCAP 4.39 + estimated synergies 3B) = 12.58B MCAP (merged). Post merger outstanding Siri stock (1.47B current shelf for merge 1.9B=3.37B shares - xm outstanding .34B(will no longer exist) = 3.1 billion shares) 12.58 MCAP/ 3.1B shares = 4.19 PPS. If ya use 2 billion savings/synergies then ya drop to 11.58B MCAP/3B shares= 3.86 PPS. Who realy knows what the actual savings will be. Those are the analyt's estimates.
The increase in market cap will not be solely based on synergies. The market cap will also be increased based on the assumption of much larger net sub adds and more rapid eps and revenue growth. Once the eps turns positive it will continue to rise at a rapid pace. Remember, companies with rapid growth get a higher valuation than those with slower growth. BTW, your $3B figure is at the low end of analyst estimates. I've seen estimates as high as $6B. Let's use the midpoint of $4.5B in synergies and compare it to the current combined market cap of approximately $8.5B. The ratio is staggering. Imagine if you could merge say an HPQ with an AAPL and gain $150B in synergies with their combined market cap of $275B. So you can see how this ratio of synergies to market cap is phenomenal, not to mention a faster pace of revenue growth.