Will Sirius XM Drop to the Teens? 42 comments
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A stock price that was beyond comprehension only three months ago is now edging ever closer to actually happening. As of this writing, Sirius XM Radio (SIRI) is in danger of dipping into the teens. This will place the equity at a new all time low, as well as bring it further away from the $1 billion market cap that would allow the company to access a $100 million credit facility through Loral (LORL).
The company has expressed that they are active in trying to negotiate financing for the $200 million due in February of 2009, but as yet there has been no indication that acceptable terms have been reached. The debt issue and frozen credit markets have taken their toll on many companies, and Sirius XM has not been immune.
While company guidance remains that profits are around the corner, the street perception makes any such projections difficult to believe. Negative headline after headline mires the entire investment community, and at this point a recession seems to be a self fulfilling prophecy. The economy is confused, and retailers are so worried that they are initiating Black Friday sales a week and a half early in hopes of prying money from consumers who seem more apt to hold onto their dollars.
With this being only Tuesday, we could be in for a rough week, and at this point, unless there is positive news to reverse the trend, a visit to the teens seems more and more likely. At that point, people will begin to wonder whether you can get a share for one dime!
Position: Long SIRI.
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We have a confidence problem and are feefalling and that puke Paulson says today "he's convinced" the financial markets have stablized!!!!What??? They HAVE to suspend mark to market accounting for a year...TOMORROW!!! TODAY...Congress must pass these appropriations. I can't believe they are pulling this autos crap about a pittance 25B. My portfolio is in shambles, hard working people have lost TRILLIONS in wealth since only September and congress wants to see a business plan.
I want to know how you really feel my friend... The congress is a joke and its all politics as usual. They are not going to give Paulson or the Bush any relief on their way out. December 8th only puts these guys closer to the next congress and the deal will then get done... shameful.
Meanwhile as you say the middle class gets wiped out and kicked in the arse for investing in the stock market, hoping to make a buck.... Your comment about the foreign autos taking away the last of our icon manufacturing has my Dad rolling in his grave... Not what he had in mind coming home from World War II or what was thought by those Veterans when we called a cease fire on the Korean War. Sad to see the Circus it has all become.... pushing and shoving for the limelight while hard working Americans are looking for solutions in tough times. I am totally disgusted with these lobby paid morons, claiming that they give a shat for their home based constituency, is a joke. They sold their sole to the Washington lobbyists the minute they attended a campaign fundraiser...... They will all go home and eat their Turkeys and claim that their hands are tied and how terrible it all is......
Anyways SOS just a different day.... I supported my position today with a buy in at .145 bringing my recent buy back in to an average of .225 / share. My overall cost per share to brake even is 1.45 / share. Since we broke down to 1.50 when I was at an average cost of 2.20 /share, all the buying and selling of shares at various ranges has gotten me a lot more shares and bettered my average in by .80 / share. If we can avoid going into bankruptcy, which I now give about 40 - 60 that we could at these SP levels, maybe I can get it to under a buck. In order to keep my sanity at these levels, I am now focused on these metrics as I wait.
Boy does this suck...... Citibank is now trading under $5 / sh. How much rebalancing do you think that is going to cause in some Mutual Funds if it stays their for a couple of days? The Dow broke a very important technical support level today of 7850 and the S&P broke through 776-780, this does not signal anything good going into Friday or the short trading week ahead of us..... We should all just turn our computers off and come back after we eat crow, I mean turkey.....
But my point is, another reason to vote no to shares and reverse, is now there will be no way they won't extend the NAS listing requirement suspension probably from Jan 16 until March 16 (or April). No way that will not happen now...
And the problem is, as you know, we will all not get the memo when its time to get back in....... by the time we can see its real, we will have lost 1/2 of the gain up.....
Now the next crisis to take us down again is going to be about how the Commercial Mortgage Backed Securities, CMBS market is falling out. With large defaults beginning to occur this week, creating downward pressure as Bonds Values that represent these bundled commercial mortgages, with as you say, Mark to Market devaluations of the underlying properties. The underlying property values being assessed have nothing to do with the performance of the loans. Payments are being made, with defaults only being brought on by the requirement of additional capital to support the Mark to Market valuations. It is similar to a Margin call but on Commercial Real Property values instead of Stock Equity. Suspension of Mark to Market has got to happen or else as bdp above has said, it might be time to grab the ammo, hide the gold, and head into the woods.
Thanks for those images regarding your Dad. You are so right. IMO, this week we hit an all time low in this country during the Autos testimony on the Hill. Sadly, we have learned that our congress values the foreign auto industry living and working in this country more than they do its own. An industry that was the backbone of this growing nation. But see? This is what we do. This is the thanks. It's the value that too many no longer have in this country. As far as I'm concerned, we've changed forever. It was the death blow. Honda of Indiana? That's who we look up to huh? Wow. We are done. And why? All for the almighty buck (toilet paper as relmor says). Anything we're done with, just take 'em out back and shoot 'em--even the entire US auto industry. Hey, can't keep up? just go away..thanks for the memories..thanks for shaping our country...now get out! Just like Lehman (who ostensibly financed our railroad system since the Civil War? What? You're now mismanaged? Sorry. we just gotta cut you loose..take 'em out back and shoot 'em! That's what our congress is doing to us. I just heard a great angle on this. Thanks to our wonderful arshole congress, all the people hanging by a thread on this money can now choke on their Thanksgiving dinners--wonderng if they will have jobs. Thanks congress. They suck.
Yeah, I thought about buying some today but, I just can't bring myself to buy any more SIRI. What I have in @ .25/.27 is it. Like you say, who knows if BK is the way they go. I just hope their requests for shares and reverse are denied!
As you say we're in a free fall territory now. We'll just see how low they want to go...it's sickening...
As we say, if they would just freaking suspend M2M for a year to help sort out the toxicity without devaluing whole security bundles at a time, that would be an incredible relief valve for the economy. I'll tell ya I can't wait for both Pauslon and Bernanke to hit the road. Licking my chops!
totally agree that the delisting issue is soon to be Moot. The extension will probably go through third quarter to be revisited. This deleveraging proccess has never happened with such a broad spectrum of the economy involved in recent history.
The artificial paper created on the backs of Residential and Commercial Real Estate, that was given leveraged value (Mortgage Back Securities) and then insured with more worthless paper, Credit Default Swaps (CDS), which were given value because an unregulated market was developed to trade the paper. Then the Mark to Market happened in the residential market first, with home prices fallen, valuing the MBS notes (paper) at 60, 40, 30% of their original value, depending on what markets the assets (homes) were located in, and the banks got their margin call on these MBS notes. (Note holders wanting their money). The Banks (Bear Stearns types) called in their insurance, Credit Default Swaps (CDS) only to find that folks like (AIG) had traded the paper everywhere (MBIA also but not as much), and had no capital to support the run on this product. Now if the CMBS Marget fails because of Mark to Market, and it is currently, we will not be able to stop the wreckage that will occur. Deleveraging in this accelerated manner, Mark to Market, will kill the world wide economy. Leveraging happens over years, deleveraging must be decelerated for the economy to recover, Mark to Market is a process that is the same as Cold Turkey, it might work with addiction but it is very painful, in Economies it is a Depression that will take decades to recover from. IMHO
Dow
52-Wk Low 3:56 PM EST 7,506.97
52-Wk High 12/11/07 13,780.11
S&P
52-Wk Low 3:56 PM EST 747.78
52-Wk High 12/11/07 1,523.57
We can lose another 50% or big money can do something about it. All you have to do is stop being a crybaby and WAITING to GET BACK IN after the carnage is done. If you keep waiting, we will be in a depression and then no one will care if you feel lie "GETTING BACK IN." Get back in and fight back against runaway selling and shorts...NOW!
He brings up another maddening point. Where is Bush? Who cares if you're done and leaving this cvountry in ruins. We the Peons want to hear from you dude!!!! Tell us something and quit pretending we are out of a crisis (as Paulson said today we were out). NOT!
Then Obama. That guy MUST start getting involved RIGHT NOW. Where is he regarding Auto money? He needs to be much more visible esp if GWB is going this lame duck. This country needs a frigging leader and if he's it, stand up now. Step on toes if you have to. You're only stepping on toes of someone who can't wait to retire to the ranch. He could care less. Obama needs to stand up NOW. Look at the numbers on my last post--and we're still selling off 400pts in the last hour everyday. The inmates are running the assylum. This can not wait!
Okay, Okay, I'm done being morose...... A while back Relmor and I had a discussion of how low the Dow and S&P could go. My feeling was if we break DOW 7000 then we could go to 6200-6300 and if we break 720 on the S&P we could go to 575-660. I said that that would mean that a lot of things went additionally wrong. In my mind The Autos failing and taking unemployment to 10-12% and the CMBS market failing in addition to what we already have on the Residential side would do this. Those two events will take everything else down in this House of Cards that is the Treasury Bail Out plan, TARP, IMHO,
Date High Low Open Close
09/18/02 8,253.53 8,051.91 8,203.07 8,172.45
09/19/02 8,170.65 7,939.83 8,170.65 7,942.39
09/20/02 8,017.37 7,922.07 7,945.93 7,986.02
09/23/02 7,984.77 7,788.42 7,984.77 7,872.15
09/24/02 7,871.23 7,666.00 7,871.23 7,683.13
09/25/02 7,891.28 7,665.66 7,687.16 7,841.82
09/26/02 8,012.42 7,844.62 7,844.62 7,997.12
09/27/02 7,996.01 7,694.72 7,996.01 7,701.45
09/30/02 7,698.81 7,460.78 7,698.81 7,591.93
10/01/02 7,964.24 7,558.36 7,593.04 7,938.79
10/02/02 7,969.37 7,742.02 7,936.57 7,755.61
10/03/02 7,913.47 7,693.33 7,753.46 7,717.19
10/04/02 7,784.81 7,472.01 7,719.34 7,528.40
10/07/02 7,637.91 7,404.94 7,528.68 7,422.84
10/08/02 7,622.66 7,331.42 7,425.82 7,501.49
10/09/02 7,500.03 7,282.39 7,499.96 7,286.27
10/10/02 7,560.93 7,197.49 7,286.34 7,533.95
Here's how we got here:
11/04/08 9,653.95 9,323.89 9,323.89 9,625.28
11/05/08 9,616.60 9,111.47 9,616.60 9,139.27
11/06/08 9,155.44 8,637.17 9,134.01 8,695.79
11/07/08 8,961.57 8,696.03 8,696.03 8,943.81
11/10/08 9,159.58 8,760.46 8,946.60 8,870.54
11/11/08 8,867.91 8,560.71 8,864.32 8,693.96
11/12/08 8,684.60 8,265.29 8,684.52 8,282.66
11/13/08 8,876.59 7,965.42 8,281.14 8,835.25
11/14/08 8,923.18 8,469.99 8,822.19 8,497.31
11/17/08 8,571.30 8,246.89 8,494.84 8,273.58
11/18/08 8,477.95 8,105.44 8,273.34 8,424.75
11/19/08 8,504.64 7,987.08 8,420.69 7,997.28
11/20/08 8,187.40 7,506.47 7,995.53 7,552.29
As we've said this time the carnage much more widespread than the 02 scenario..and our volitility swings are much more intense. Meaning if we dropped another 350 (which is the new 175-200 of old) tomorrow and tested that '02 7,197.49..we could pop next week going into the holiday. Maybe this is what they are playing for, to test this low. Or what if they dip into a very brief 6 handle? That could cause a panic up but I'd rather see us hold that 7,197.49 then bounce. After that...your scenarios are next. Jeez!
We need Obama to get visible RIGHT NOW...that would help. IMHO...
Treasury and Fed Secretary announcements will probably happen after the Thanksgiving Holiday and December will probably be the start of his visibility. He will probably show his hand on the Autos Work Plan for use of the money that he will eventually push through for approval. A little Holiday bounce will follow and the media will be actively tearing apart his selections no matter who he picks.....
In the mean time the annual meeting will take place and outcomes will be known on the RS and Dilution of Shares. With the lack of any defense of the company's SP from management or clarity on its intentions, their is no reason for either and I will vote against both. I was a RS as a tool in the tool box guy, but with the new numbers and probable extension further of the delisting rules, and my growing lack of trust for managements intentions, as you have said, I would have to be a moron to give them this type of power now.
The dilution is not needed unless financing is going to be done with shares. If that is the case, they need to tell us before the meeting that this is their plan for refinancing. If that is the case then I don't want to be in this company any more until well after the first half of 2009 when their is more clarity on where this company is going. Unfortunately a perfect storm of economic circumstances, Financial Melt down, Autos Panhandling in Washington (and doing a very bad job of it), and an overall lack of consumer spending, is making this company's chances for growth very doubtful.