Sirius Satellite Radio Public Response (Case Study Sample)

Sirius Satellite Radio Public Response.

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Introduction
Howard K. Sterner is a renowned and famous media personality. He describes himself when out of the studio as the king of all media. An American born on 12th January 1954 was at one time the highest paid radio presenter in the USA history.
When Sterner touched anything its demand naturally increased. His celebrity status worked well for him and any products associated with him. This is the reason why Sirius Satellite Radio offered him a deal worth $500 million dollars.
Sterner was more famous than even the Satellite Radio Station, Sirius. Sirius Satellite Radio, the company that was signing a deal with Sterner became successful after Sterner agreed to the multi-million deal. Sterner made it to the top because of his determination, zeal and strength. His ability to multi-task, work long hours and produce excellent results. Using his influence and marketing skills, Sterner made millions in profits for his associated companies and other projects related to him.
a) What assumptions caused Sirius stock price to increase dramatically.
The major issues that can attract investors to a company are related to efficient and competent management. Good managers provide and inspire confidence and reliability in the company’s activities and operations. In the case of Sirius Satellite Radio, the agreement between them and Sterner provided an opportunity for Sterner to join the firm. Famous for his books, radio host programs, movies and other forms of entertainment, Sterner might have been the change they were waiting for. The public reacted positively hopping that Sterner would bring in his wide and extensive network of funs and friends, his marketing and management skills to the Satellite Radio. These would directly translate to huge profits and better business prospects for Sirius.
b) What is the best method for capturing the value of this agreement?
The best method is to look at the effects of this agreement. The agreement would bring in one of the most famous and talented media personality in America. His management and marketing skills are known worldwide. This alone provides a platform for growth and better future prospects for expansion. Most investors want good returns for their investment. The agreement presents an opportunity for attaining these goals and objectives.
c) Does the fact that the agreement had been rumored for some time before the agreement bear any weight on its valuation?
Before the valuation the rumors that circulated were pegged on the agreement. If the deal had failed, then even the valuation would have been affected negatively. The value of the shares would have also dropped. The prospect of having a famous presenter, then failing to sign him in would definitely create a much worse scenario than the original predicament. The agreement certainingly brought a lot of positive changes to Sirius Satellite Radio. (Vance, 2003)
d) Do you think this agreement proved to be valuable for Sirius?
The agreement provided a way of introducing new ideas and ways of managing the company. The agreement drew people and other investors to Sirius. It was very valuable. The value of its shares rose positively and a lot of stock was also sold. These would eventually impact positively on its financial documents. The earnings and profit margin would definitely improve.Sterners celebrity status created an independent group of supporters who also bought ownership rights.
Top management decisions like key recruitment, mergers and acquisions, significantly affects the value of a company’s shares. It can be positive or negative depending on the choice of the management. The main issues in a company must always be done carefully and in a transparent way so as to create a positive response from the public. (Khan, 1993)
The factors that influence the cost of shares and its values are mostly, efficiency, profitability, dividend policies and its trading history. The nature of business, the perform...