Is Sirius Worth Anything? Goldman Says 25 Cents 14 comments
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Goldman Sachs analyst Mark Wienkes this morning repeated his Sell rating on Sirius XM (SIRI), while cutting his price target to 25 cents from 50 cents and trimming estimates. He contends that 2008 subscriber forecasts will be cut or missed.
“Our lowered estimates and price target reflect further erosion of satellite radio industry demand,” he writes. He says subscriber acquisition costs, average revenue per user and churn are all moving in the wrong direction, and notes that revenue has been unable to cover operating and capital expenses, leaving the company with negative free cash flow and dependent on the capital markets for ongoing funding. Wienkes contends that the company’s inability or unwillingness to have previously refinanced its capital structure “is now unlikely to preserve much, if any, equity value.”
Wienkes says that equity holders “are facing near-certain dilution via either higher interest charges or new share issuance,” as seen with the recently authorized 67 million share exchange for $30 million of the company’s $300 million convert - 3% of the debt set to mature next year. If the company were to refinance just its remaining $670 million convert with stock, it would imply 1.47 billion more shares, or about 50% equity dilution, he notes
For 2008, Goldman now sees revenue of $1.777 billion, down from $1.783 billion; for 2009, $2.63 billion, from $2.67 billion; for 2010, $2.874 billion, from $2.997 billion. He sees per-share losses of 35 cents a share this year, 18 cents next year and 14 cents in 2010.
Yesterday, SIRI jumped 11 cents to 38 cents; in pre-market trading, the stock was up another 4 cents, to 42 cents. Today it is down 13% to 33 cents.
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This article has 14 comments:
SHAREHOLDERS UNITE . . . KEEP DRILLING . . . THE FUN IS JUST STARTING . . .
FOLLOWING IS A MEMO FROM THE DESK OF MICHAEL HARTLEIB:
Strictly a coincidence or have we narrowed down where all the illicit (?) trades are coming from? I and others have been doing some research and it appears as though many of the shorts on Sirius have been routed through a company formally known as Morizio Associates LLC, also known as ISEG, now reregistered with the DTCC clearing Corp. as ISEROUTE. On Thursday October 23rd I made a phone call to them and let them know that there is a group investigating all of the Sirius short sales, many of which appear to be naked, and were being placed through ISEROUTE, their company.
The gentleman I spoke with wanted to know who I was. I told him that was unimportant. I told him that Racketeering charges were going to be filed against several companies for facilitating these illicit trades. He seemed quite uncomfortable and did not want to answer many questions and suggested I talk to their compliance officer which happens to be in Los Angeles Ca. Phone Number 213- 250- 1406. I left 2 messages to please contact me. He did attempt to reach me on Friday but I was on another call and didn’t answer. I returned his call and he didn’t answer so I left a voicemail and gave more details about my concerns as to all of the short sales on Sirius being routed through their company. Within 30 min I received an incoming call from phone no.312- 902- 5438. The gentleman calling let me know that he was calling me about my concerns with ISEROUTE. I informed him that there is an investigation on going that shows on level two that millions upon millions of Sirius shares shorted are being routed thru them.
I suggested that many of these shorts were illegal and the racketeering charges would be brought forth against several companies and that ISE may be included. I explained that it has been known for quite some time that off shore hedge funds have stolen millions of dollars from Sirius share holders by nakedly shorting Sirius stock. I informed him that this was in violation of regulation SHO which require shares shorted be borrowed from actual shares owned in brokerage accounts. His response was that they were a routing company. A pipe line to route and facilitate trades. It wasn’t their responsibility but the broker placing the trades, to insure that the trades are in compliance with regulation SHO. I informed him that this was unacceptable and amounts to nothing more than their clients robbing a bank and that they being the driver of the get away car. It wasn’t until the end of this call that he informed me that he was an attorney from the law firm of Katten Muchin and he was calling on behalf of his client ISEROUTE. So, the compliance officer never spoke with me and immediately contacted a law firm in Chicago.
Share prices up on Friday in a down market and share prices up today. Is it just a coincidence?
Phone 609 430-0100
I suggest that every party in our group contact ISE and let them know that we will be holding them responsible for all of the illegal short sales and that they are just as responsible as the off shore hedge funds in a conspiracy to defraud shareholders and steal billions of dollars.
The ISE Stock Exchange is a part of the International Securities Exchange (ISE), a family of innovative securities markets. ISE/Eurex Announcement
December 20, 2007: Eurex and ISE complete merger
• Combination expands Eurex’s global liquidity network into the U.S. and U.S. Dollar products
• Complementary customer base and product offerings provide cross-selling and innovative product development opportunities
• Integration approach leverages strengths of both organizations while maintaining respective uniqueness to address specific market needs
The combined group is the leading transatlantic operator of derivatives marketplaces with powerful distribution capabilities in two of the world's most important capital markets. On a combined basis, Eurex and ISE will be the market leader in individual equity and equity index derivatives worldwide. Its wide range of both U. S. Dollar and Euro denominated products is unique in the market: the combination is home to the Euro zone interest rate and equity index benchmark derivatives products and offers options on all major U.S. and European companies. Currently, ISE and Eurex distribute their products to approximately 560 direct exchange members
Business address ISEROUTE is 194 Nassau Street Princeton NJ 08542 Phone 609 430-0100
IF YOU ARE NOT UP TO THE JOB YOURSELF, I ASSURE YOU IT WILL BE DONE FOR YOU
May 8, 2007
Mel Karmazin
Sirius Satellite Radio, Inc.
1221 Avenue of the Americas
36th Floor
New York, NY 10020
Dear Mr. Karmazin:
As a long time shareholder of, and an advocate for Sirius Satellite Radio, I would like to start by saying I believe in the Company, its model, the potential of the sector, and your leadership.
After nearly eighteen months of research and with great consideration for the chain of command, I now find it necessary to direct my concerns to you and respectfully ask for your involvement. That being said, my desire is not to do anything that would jeopardize the prospects of the merger and/or the Company in general.
I have obtained information through the Freedom of Information Act issued by the S.E.C. and other sources, that strongly suggests manipulation in Sirius shares and violations of Federal Securities Law. In speaking with Investor Relations, I have been told it is not the Company’s responsibility to monitor the trading of the Company shares but instead, is the responsibility of the regulators. I disagree and believe the Company has a fiduciary responsibility to protect the interest of its shareholders. I cite the pending Overstock.com, Inc. et al v Morgan Stanley & Co, Incorporated et al litigation filed on behalf of Overstock and its shareholders (Superior Court of the State of California – Case #CGC-07-460147). I believe this case sets a precedent for companies such as Overstock to protect their shareholders and preserve the integrity of their shares. Overstock and its shareholders have seen nearly a forty percent increase in share price since the Complaint was filed.
Page 2
Mel Karmazin
May 8, 2007
After the alignment of XM and Sirius enterprise values and the announcement of the merger agreement, I expected the companies would trade on their merits and the constant borage of factually incorrect and/or misleading commentary would end.
With the stock at these levels, I am fearful of an unsolicited bid or private equity acquiring the Company for a nominal premium at the shareholders’ expense.
I have had conversations with Wesley Christian, the lead counsel for the Overstock suit, and other counsel who are interested in filing a similar suit on behalf of Sirius shareholders against the financial institutions that facilitated these illicit trades. Before proceeding, I am requesting a face-to-face meeting with you to ensure that the shareholders’ interest and the Company’s interest are aligned.
Very truly yours,
Michael Hartleib
MH/th
(private note to Mel's screeners: Forget the termination clause Mel; ain't gonna happen on our watch. You will be reassigned to the mail-room before shareholders will permit that. Thanks for the mandarin-chinese reference; good to know you are getting the messages . . . now, a little less "knocking-on-wood" and a little more taking care of business)
hey what about 23 cents, no 26 cents..... If he is wrong can he be fired?
or given a big fat bonus to match his belly?
Who are these nimrods-The streets of NYC are a mess-Little Mikey needs to fill some potholes and be productive-
Even better why do you people even print this garbage?what are you seeking? alpha?
Obama share the wealth- fire all "analysts"?
ie stand up philosiphisers
Hey little Mikey-can u sell used hondas too?
know if they are just stealing it legally by hiding it in the costs and operating expenses and spending crazy on their talent friends? There is something wrong, between the incoming revenues and the short sellers,
the money is disappearing when there is enough cash flow to help.
The equity holders are being taken to the cleaners. It's about time that the share holders demand some accountability. Share holders should start mobilizing to get the answers thru criminal charges and prosecution if necessary. If some one robbed a bank of 1b dollars the Fed's would be on it. But if the share holders get robbed 1b where's the legal action to get the crooks.
What?
Hey I don t see that guy over there giving me a hurumph
Goodness people-just buy more at 25 cents
It aint goin bankrupt -and if they take it private they have to buy up the majority anyway-If you are some looser that thinks from a prior purchace he dollar cost avg at 3 bucks you have been asleep
Stop bitchen-If it were a bet a Vegus you would take it-
Hey double down at 12.5 cents
give it a rest
sorry gotta go rip off some one on ebay and collect my disability check
they said. It's not all about losing money, it's about having a
backbone to stand up when the music man comes to town,
whistles a tune and says jump, and you say how high. Some people
might think it's whining about money but it's about letting little people
steal while others just sit on the side lines and are afraid of getting
a bloody nose because they won't fight for the principle, whether
it's a penny or a buck. Some people sound like they have their head up
Mel's you know what. Let's look at the books. Either it's bad management, overpaying for talent, costs and operating expenses,
or maybe it's going into some one's pocket. No mystery if things are
transparent. Unless people are afraid of the truth. Maybe you can't handle the truth.
I am trying to put a time line together that ties Mark Weinkes pronouncement to the downside to the Sirius' Stock Price. I know pre-merger in June, 08 he was at around 2.25, then in July, 08 he proclaimed 1.50 and we thought how absurd but the stock went to 1.85 and then rebounded to 2.68 right before merger approval. Then merger is approved by FCC, on a Thursday/Friday, 7/31-8/1, last minute negotiations (ugly financing deal) over the weekend and 8/5 FCC issues official reports, we get details of the deal and the Stocks lent are at the exact price of Weinkes target at 1.50. The stock bounces around 1.30 and 1.53 for a couple of weeks and while all these new shares to be shorted need to make money, Weinkes 1.50 target being reached, readjusts to 1.00, and says he as easily could have said .50. Stock Price nose dives to .85 - 90, we wait for Mel, Mel speaks and the stock goes to .70 and then to .60, and Weinkes confirms new target of .50 and we are all F**k'd. Now after feeling BK Fears, Proxy Statement with a RS and Dilution of shares (all shareholders feeling betrayed by Mel), a retrace approaching his old target of .50 as we see a marketing video saying again we're working on it, what does Weinkes do????? Announces a new target of .25 and questions everything without any real changes in the company's execution.
I really would like to put shorting activity details, what companies and who and what clearing house were the trade cleared through, to the dates of each Weinkes announcement date of his new target. No one has adjusted their targets with this kind of accuracy period ever in the history of trading without insider information and spending time in jail.
An excerpt:
Risks Relating to Our Common Stock
The Price of our Common Stock Historically has been Volatile. This Volatility may Affect the Price at which you could Sell our Common Stock, and the Sale of Substantial Amounts of our Common Stock could Adversely Affect the Price of our Common Stock.
The market price for our common stock has varied between a high of $4.15 and a low of $0.22 in the past eighteen months. This volatility may affect the price at which you could sell our common stock, and the sale of substantial amounts of our common stock could adversely affect the price of our common stock. The price for our common stock is likely to continue to be volatile and subject to significant price and volume fluctuations in response to market and other factors, including the other factors discussed in the risks related to our business and the business of XM Holdings; variations in our quarterly operating results from our expectations or those of securities analysts or investors; downward revisions in securities analysts’ estimates; competitive developments; and capital commitments.
In the past, following periods of volatility in the market price of their stock, many companies have been the subject of securities class action litigation. If we became involved in securities class action litigation in the future, it could result in substantial costs and diversion of our management’s attention and resources and could harm our stock price, business, prospects, results of operations and financial condition.
In addition, the broader stock market has recently experienced significant price and volume fluctuations. This volatility has affected the market prices of securities issued by many companies for reasons unrelated to their operating performance and may adversely affect the price of our common stock. In addition, our announcements of our quarterly operating results, changes in general conditions in the economy or the financial markets and other developments affecting us, our affiliates or our competitors could cause the market price of our common stock to fluctuate substantially.
In addition, the sale of substantial amounts of our common stock could adversely impact its price. As of October 24, 2008, we had outstanding approximately 3,312 million shares of common stock (including approximately 262 million shares of common stock issued and lent to affiliates of the initial purchasers of the notes in order to facilitate hedging transactions), options to purchase approximately 161 million shares of our common stock (of which approximately 117 million were exercisable as of that date at prices ranging from $0.49 to $31.25) and convertible notes convertible into approximately 188 million shares (at conversion prices ranging from $0.69 to $28.46). The sale or the availability for sale of a large number of shares of our common stock in the public market could cause the price of our common stock to decline....
PLAN OF DISTRIBUTION
The selling stockholders, including their transferees, pledgees or donees or their successors, may from time to time offer and sell the shares of our common stock into which the notes are exchangeable directly to purchasers or through underwriters, broker-dealers or agents, who may receive compensation in the form of discounts, commissions or concessions from the selling stockholders or the purchasers of the common stock. These discounts, commissions or concessions as to any particular underwriter, broker-dealer or agent may be in excess of those customary in the types of transactions involved. Notwithstanding the foregoing, in no event will the method of distribution take the form of an underwritten offering of our common stock without our prior agreement.
The shares of our common stock into which the notes are exchangeable may be sold in one or more transactions at:
• fixed prices;
• prevailing market prices at the time of sale;
• varying prices determined at the time of sale; or
• negotiated prices.
These prices will be determined by the selling stockholders or by agreement between such selling stockholders and underwriters, broker-dealers or agents. The aggregate proceeds to the selling stockholders from the sale of the common stock offered by them will be the purchase price of the common stock less discounts, commissions and concessions, if any. Each of the selling stockholders reserves the right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly or through agents. We will not receive any of the proceeds from this offering.
The sales described above may be effected in transactions:
• on any national securities exchange or quotation service on which the common stock may be listed at the time of sale;
• in the over-the-counter market;
• otherwise than on such exchanges or services or in the over-the-counter market;
• through the writing of options; or
• any combination of such methods of sale.
These transactions may include block transactions or crosses. Crosses are transactions in which the same broker acts as an agent on both sides of the trade.
In connection with the sale of any shares of our common stock into which the notes are exchangeable or otherwise, the selling stockholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the common stock in the course of hedging the positions they assume. The selling stockholders may also sell shares of our common stock into which the notes are exchangeable short and deliver such shares of common stock to close out their short positions, or loan or pledge such shares of common stock to broker-dealers that in turn may sell such securities.
The selling stockholders or their successors in interest may from time to time pledge or grant a security interest in some or all of the shares of our common stock into which the notes are exchangeable and, if any selling stockholder defaults in the performance of its secured obligation, the pledgees or secured parties may offer and sell such selling stockholder’s shares of common stock from time to time under this prospectus supplement; however, in the event of a pledge or the default on the performance of a secured obligation by any selling stockholder, in order for the shares of common stock to be sold under cover of the registration statement of which this prospectus supplement forms a part, unless permitted by law, we must file an amendment to the registration statement under applicable provisions of the Securities Act in which the pledgee, transferee, secured party or other successors in interest are included as selling stockholders under this prospectus supplement.
How can i get proactive here and get involved in a solution?
You lost a fortune? I'm sorry to hear that but I am in the green in SIRI, as with many who bought in the low 20's. Just stop crying and buy at .22.