Billionaires Warren Buffett, Israel Englander, and Steven Cohen Are Piling Into Wall Street's Most Popular Reverse Stock Split of 2025

A reverse stock split is a tool that publicly traded companies can use to manipulate their stock price and outstanding share count without changing their market caps.

Companies typically use them to raise their stock price to make it more comparable to peers. They also come in handy if a company is at risk of breaching compliance rules set by the New York Stock Exchange or Nasdaq Stock Market, which stipulate that companies could eventually face delisting if their stock trades for less than $1 per share for at least 30 consecutive trading days.

Reverse stock splits aren't particularly popular because they may suggest that management teams don't think they can increase their stock price through pure operational execution. However, when three all-star investors like billionaires Warren Buffett, Israel Englander, and Steve Cohen all buy a stock, that can be a bullish indicator. Recently, these three titans purchased one of the most popular reverse splits of 2025.

Image source: Getty Images.

The smart money piles in after a complex transaction

Earlier this year, the digital audio assets including Sirius Satellite Radio and the Pandora music streaming service assets were split off from Liberty Media into a new company called Sirius XM Holdings (NASDAQ: SIRI), which former Liberty Media shareholders own a controlling stake in. The complex transaction also reflected a 1-for-10 reverse stock split.

Before the transaction, Liberty Media had several classes of shares tracking Sirius, which made the corporate structure confusing for shareholders. Since the creation of the new company, billionaires have been piling into Sirius:

• Warren Buffett's company, Berkshire Hathaway, purchased $106 million of shares in early August. Following this purchase, Berkshire now owns 37% of outstanding Sirius shares.
• Steven Cohen's fund, Point72 Asset Management, initiated a new position in Sirius in the second quarter, purchasing close to 4.2 million shares.
• Israel Englander's massive hedge fund, Millennium Management, increased its position in Sirius by 139% in the second quarter and now owns more than 2.1 million shares.

Seeing three genius investors go long the same stock can seem like an incredibly bullish signal, and it certainly could be, but investors also shouldn't follow the "smart money" blindly. Hedge funds tend to take a short-term horizon when investing, although Berkshire is usually long-term oriented. Additionally, while Buffett, Cohen, and Englander all run their perspective firms, they are likely not involved in every investment decision.

Why Sirius could be a long-term value play

Sirius is either going to be a value trap or a genius value play. It remains to be seen. On the plus side, it's viewed as one of the only legal monopolies in the U.S. The company has the only commercial satellite license from the U.S. Federal Communications Commission. However, this monopoly has not exactly served the company well, due to intense competition from companies like Spotify in a shifting audio market.

In recent years, Sirius has struggled to grow subscribers and even seen subscribers decline, sending the stock tumbling close to 61% over the past five years. Now, management does have a plan to turn things around, which involves new pricing and subscription models, a new in-car tech platform, and trying to build out a new stream of advertising revenue, partly through podcasts, which the company is investing heavily in. Management's long-term targets involve adding 10 million subscribers to get to 50 million total, and growing free cash flow by 50% to $1.8 billion.

But since Sirius announced this grand plan in September 2024, it has yet to show tangible progress in its financial results. Subscribers were still down at the end of the second quarter, compared to the same time in 2024, and revenue was down as well.

It's too early to know if management's plan will work, and the stock remains a show-me story that certainly won't transform overnight. But one good thing for shareholders is they can collect Sirius' fat 4.7% dividend yield while they wait for the transformation to play out. And with a trailing-12-month free-cash-flow yield of 12.3%, the dividend looks quite sustainable.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and Spotify Technology. The Motley Fool has a disclosure policy.