Satellite Radio Is Not Immune to Big Three Troubles 141 comments
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There are those that say the future of satellite radio rests with the automobile. In many ways they are correct. It is through the auto that the bulk of satellite radio products are introduced to the market, and concentration on retail radios has faded. The concept is simple. Put the satellite radio receivers in the cars, and the subscribers will come. Past history tells us that about half of those exposed to SDARS elect to keep the service.
Now satellite radio’s biggest OEM partners are running on shaky ground. Chrysler is the closest to going down, and GM is not far behind. Ford (F), the big three company in the best position, is trying to avoid using government bailout money, but is itself in a dire situation as well.
An auto bailout has been passed by the house, but the measure needs to get through the Senate in order to become a reality. At stake is the very method in which cars are made. Unions, suppliers, and the management of the big three have to reach a common ground, and that is no easy task. Partisan debate in the Senate will be the new focal point.
Sitting on the sidelines we have Sirius XM Radio (SIRI). GM, Ford and Chrysler have been the biggest installers of satellite radio. All three companies are having trouble selling cars, and that simply means that less people are being exposed to satellite radio.
Some say that if one of the big three went down, it would not be an issue for SDARS, because auto buyers would simply migrate to another brand, and thus still be exposed to satellite radio. This is not at all the case. The deals with auto manufacturers differ. Most other companies are not installing satellite in the same number of cars as the big three, and many do not have the same kind of revenue incentives that the big three were lucky enough to get. GM, Ford, and Chrysler have a cash incentive to install SDARS. Many other OEMs do not.
Additionally, there is the issue of equipment supply. If a big three company goes down, perhaps as much as 100,000 chipsets will be virtually destined for purgatory. Coordinating and increasing installations is a process. It does not happen overnight. A gap will happen in installations, and SDARS may potentially have to pony up additional subsidies to other OEM partners to accelerate the process, or sales could be driven to other companies that enjoy higher revenue share contracts. Make no mistake, SDARS is not immune to the problems of the big three. The question is how big the impact will be, and how long it will last. Satellite radio should be able to weather the storm, but this whole auto issue is a headache that SDARS simply does not need at this point.
Satellite Radio investors should watch the news carefully regarding this issue. They should also monitor auto sales, which companies are expanding market share, which are losing it, and how dedicated each manufacturer is to satellite. The bailout issue will be the headlines, but sector watchers can already be preparing and getting a better understanding of how the dynamics of the automobile industry impact the sector.
Disclosure: Long SIRI.
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This article has 141 comments:
On Dec 11 02:05 PM wcorowitz wrote:
> everytime this stock inches up someone knocks it back down to 15
> cents. Does anyone know who? It seems only hedge funds would sell
> at this low price.
I'm not even even going to respond to anymore of these "Alpha" self appointed "expert" journalists. It has become obvious to me that this outfit has recruited a number of writers who, perhaps, just want to establish themselves and are being used to get "Alpha" on the map. Maybe a sign of the times. Starving journalists and out of work financial advisers or previous bank people looking for something to do writing drivel to exploit the sad business climate we find ourselves in. I guess there is always someone looking to make lemonade out of..... But I think Alpha is still just holding a lot of lemons and hasn't learned how to really make any really good lemonade. In my humble opinion :)
On Dec 11 03:10 PM tostrhed wrote:
> Cant all the other car companies around the world install Sirius
> too? It is a global radio isnt it?
>
only US and Canada to my knowledge.
Now lets give this schmuck the ole "Bronx Cheer".
Wata melon, wata melon cadillac car, let show them how bad we....is?
On Dec 11 03:04 PM marcopolodecuba wrote:
> can you sum all the people that would be out of work if Sirius Sat
> Radio gets to be what it can become? Now, do you see why they are
> supressing its progress. Now do you understand why polititians alike
> Natinal Bro. is against this new technology. Now you see why and
> against who Karmasi is going against. I cant believe this guy and
> or company has made it this far. I have thousands invested in this
> company and I tell you I dont like many things however I hate those
> that are going against Sirius so much that I am willing to do anything
> to make this company succeed. People, this is Mr poor going against
> the institution. And we need to help Mr Poor. There is a conspiracy
> behind all this and we need to stick together. Right now there is
> many many things we can do, dont waist time and help. email me, give
> me suggestions. Now, are you willing to help. are you an optimistic.
> Are you a team builder. do you hate corruption and those going against
> Sat Radio. Then if yes be an army of one. Start acting in your behave
> and not against yourself. Help Sat Radio, and help your self
I have been attempting to make my losses on Sirius back...so far...Im even...LOL Ive done nothing, but I am into SRS and it went up 25 percent today...That makes up for my 25 percent loss on it the other day....
If market DOW hits 7500, I made my Sirius loses back....And they were close to 100k.....No im not joking, thats how fast this etf moves.... Dont play it though, its too dangerous unless you know how to do a proper stop loss...
Autobailout approval wont have a huge jump for Sirius, as it is already assumed those 3 wont go bankrupt, if they did, siriius would be trading at .05 cents, not .15 cents....
Hope all is well dudes. We're coming up on some kind of resolution next week/end of year. patience and diligence are the best tools. I said this way back when in August and September. Sometimes one of the most effective tools indie investors have and need is time. You guys know this. Sometimes MM's will wait until everyone has left the party and all their wealth behind, all dejected, before they will allow capitulation or corrections. We've got this right here. Autos bridge loan delays have contributed. Not much to do about a bunch of DB congressional a-holes who love being center stage with the light shining on their ugly faces. These guys eat this up--you can just see it. Shelby, Pelosi, Frank (although he's pretty cool), Corker. Just like TARP, I gotta believe they are busy stuffing this bill with their pet projects and pork. We've got the impending meeting next Thursday. Looking forward to that finally and that should help create movement. Short auto programs could be @ .10. But there is little reason for covering until Thursday or thereafter. .14 is still the low to break to head lower. If we break .14, look for .10 - .07 entry. If that happens, that's where I light the last of my keg. New short report finally came out today (I love how we peons just get the previous half cycle when the current half cycle is just reporting)...but no surpise here:
Nov B
Sirius XM Radio Inc. $ 0.15
SIRI -0.01
Short Interest (Shares Short) 263,151,700
Days To Cover (Short Interest Ratio) 4.4
Short Percent of Float 8.22 %
Short Interest - Prior 270,261,000
Short % Increase / Decrease -2.63 %
Still over 263M. This modest decrease (only 2%) was from the move up from .14 - .23 (Nov 21 - 28)... 263M. Still a heavy number that needs to be normalized somewhere. Im still in @ .15, .17, .25 & .27. Just waiting and watching. Next in is .10 or lower to round it out if need be. Still expecting some good theater here in due time. Talk about good theater...short of a quick mini-correction here before the meeting, I can't wait to read the minutes from this meeting. How in the world does Mel justify this SP to whatever constituency in the room. This SP is not "we've been hurt because of the downturn." This SP is the market saying the company is worthless. Can't wait to hear how he justifies all this as kosher. Fortunately some of us here know what we are looking at--which is why we're still here at all. Now we are ready for the final act and resolution. Let's see how we do it...
That said, I don't want it to overtake regular radio - regular radio is FREE for the public, often employs local radio personalities and helps the local economy.
Then you have 10 million shares bought and sold and price stays put only to fall for no apparent reason after a small (100 0r 200 shares) (I mean you have 10 or 15 trades of hundred thousand shares with no change and then the price drops and drops after 100 shares.
Since I have not a clue what drives price (I always thought it was demand)
I am not really a complainer so don't misinterpet me. I always look for the humour in events. I am also not attached emotionally to Sirus. (It's my money I miss at night)
I have learned quite a bit from this. There are quite a few decent people here sharing the experiance.
Lets see what tomorrow brings.
Hope all is well with you. Yeah, congress is good for non action aren't they? I'm just amazed at what they are pulling here on the Autos for what can only be considered a "measly 14B" (in the bigger picture). They probably spend that on office supplies at the Pentagon. What a joke. If nothing, why couldn't they have just said. "OK, we'll give you this money, but you'll get no more..period. But at least this money gets them into spring when they can cut new deals with unions, etc...Instead these clowns are making a circus out of it.
As you say, we're getting closer to at least getting to some known quantiites with Mel and co.
Killer..let's see how it shapes up...
Other than the debt, the business is doing fine, actually, better than expected. This stock is a no brainer buy at these levels.
Look out shorts. If refinancing becomes available, you are really screwed. You could lose thousands.
Either way, I like having choice. That's why I want satellite radio to be a profitable niche. I also want free radio with local personalities (I'm talking talk show hosts mainly) that are very good - and relevant - and free. I'm willing to listen to some advertisements (not that I actually listen) in lieu of paying.
BTW, I have satellite radio too. I have choice. I'd like to keep it that way. I guess I must be a freak.
On Dec 11 10:02 PM between the hedges 2 wrote:
> As for you Robert Nabnerd, you couldn't pay me to listen to the crap
> on regular radio, or should I say substandard media for advertisements
> and idiotic highschool drop outs that can't make it in a business
> with a future. Get a life freak.
As for Union, I agree they have done a disservice to the auto industry and have become too powerful when calling the shots.
This is my take,
Jay
If the OEM side is dead, which seems to be true for the next few months.Where do you go to increase sales?
SiriusXM has to put all their efforts into the retail side for the time being. Millions and Millions of people do not have Sat. radio.
That is the market for them now, in fact it is the only market they currently have where they can actually increase sales.
imho
vaporgold
Looks like it. Man do these people suck. All this drama and it appears they will wind up doing what they should have in the first place...USE THE TARP! Duh. Just because I think this is going to turn on a dime, I picked up 3K more shares in pre market @ .136. Short-term for this announcement. Quite possible we could see .24 - .26 on this news over the next few days, then a takedown before Thursday...
Hey look, the White House already sanctioned this with those 3 restrictions (including the March 31 time for showing advancement...and therre was also a 30 day extension in their for the car czar to grant)...the WH just didn't plan on the Senate acting like premadonna dicks..what else is new. I hope Shelby and Corker not only get cancer but have it right now...a-holes.
I just can't believe we are going through these gyrations for 14B to help save OUR car industry and keep our economy stable. These clowns should burn in hell.
I agree with Retail being a large part of increase revenues going forward. Like with everything else befuddling this company, timing is everything. It would appear that the 4Q is focused on Retail and OEM with the Best of Both, and on Retail with Ala carte radios, Steletto's, and XMP3'. They appear to be clearing inventory in this quarter of all of their Legacy Products in preparation for the 1st and 2nd quarter 2009, where more product consolidation will most likely take place. The introduction of Interoperable aftermarket and portable WiFi friendly devices will probably be their next advertising push. This hopefully will be in time to add MLB to the lineup for both services. Six months of FCC delay forced them to miss out this year, with these products being introduced in the current holiday season. Normally OEM would have carried them through, but instead we're waiting for a bailout to keep their main "feeders" from going into bankruptcy.
If the OEM market is dead, it is so because of your own gov, dicking around all these weeks. They don't get that timing is critical right now. Everyday they fart around (and have done so now since they rejected Autos in Nov.), they are hurting these companies chances for survival as we speak by dragging their knuckles. Right now, today, people don't want to buy GM Ford or Chrysler cars because of the uncertainty. They have called way too much attention to this in the media. These clowns in congress don't have a clue as to the hurt they have already put on these companies by being idiots.
Not in defense of congress, but a Politician will look towards the next election to direct his/her actions of the day. It is never wise to look for someone or something to go against its nature. The White House didn't want to open the TARP up to further scritiny, didn't want to give Labor a bone, and was will to take this first chance (legislation), to do it for him. In all reality the plan that will be approved will be better having gone through the process, than just having the Lackey Paulson give the Auto Makers the money. At least now there is a Plan to Operate on.
I think your purchase is right on target with a short rise in SP before Thursday, on an announcement this weekend out of the Treasury on a deal. The UAW Rep. Gettelfinger, is giving the GOP a lesson on Politics this morning in his Press Conference. He is Naming Names, and giving e-mails on the negotiations with the GOP. In the end it will be a lack of GOP backbone that caused the Treasury to step in. The UAW is making their case that the GOP cares only about Bankers and not about the Working People of this country. At least that is his view. I personally don't think either party cares about the middle class, just their own pockets.
Need to get Honda on board
Toyota issued a statement today that in essence stated that a failure of any of the Michigan 3, (can't really call them the Big 3 anymore), will effect Toyota's ability to access replacement parts and material components for manufacturing in this country. All of the Suppliers have deals with all auto manufacturers. If the Suppliers go under every auto company will have difficulty keeping their manufacturing lines moving smoothly.
I am in total agreement. Congress is just staving off the real leg down in the markets. This was an election year and everyone was apolitical in bailing out the banks to shore up the markets.
Demand destruction is everywhere and the capital destruction will continue in full force next year. Merging capital markets in a Global Economy (macro econ.) works when the "money pumps" are flowing with strong, growing local economies (micro econ.). When these local economies seize up or shrink, the Global Machine grinds to a halt, and won't flow again until all of the involved local economies are deleveraged and deflated. This deflation process will reset the value of assets on the World Markets again bringing back confidence in the Global Machine again and could take years.
This will cause another dramatic leg down in the first half of next year with more sideways movement afterward while the local economies rebuild themselves. Without any elections to worry about, we are already getting a glimpse of how dysfunctional Congress will be with all of the finger pointing and home based agenda pursuits that will be coming forward. Obama's New Deal proposal to rescue the economy, will be the biggest feeding frenzy seen in years, with back room deals running rampart and Pork lining the halls of congress while the Country burns.
There are several questions that need resolution.
1. Even if Big 3 get loan is their enough demand for them to turn a profit?
2. Do we provide jobs at tax payer expense even if this results in unwanted production?
3. Would it be better for country in long term to have workers layed off and aquire new skills that allow them to reenter workforce in other segment?
4. How does USA rebuild industry (not just auto)
Manufacturing has become such a small part of labor (outside auto industry) that USA no longer supplies goods to market (forgeign or domestic) This is root cause of many of our current problems and these problems will remain no matter how much money is thrown at them. Only a rebuilding of industry can bring about major improvement.
The finance business cannot restore economy.
So are unemployed auto workers cheaper on unemployment while retraining compared to sustaining current jobs producing cars that cannot be sold at profit?
Perhaps a new company producing items no longer built in USA (like TV's)
Personally this is where I feel the 700 billion should have been spent. America needs to rebuild manufacturing capacity.
Not only does USA need to get off imprted oil it needs to get off imports of any good that is not produced by american labor.
Management needs to remember that Americans cannot purchase goods they build outside USA if Americans are not earning wages.
Trade agreements that result in cheap imports also result in citizens using goverment checks to purchase them. Somehow we have to convince business it is wiser to pay a little more at home and increase number of people who can afford to make purchase.
As a nation we need to stop using credit to aquire goods or property.
We seem to ignore fact that someone someday is going to have to pay for everything.
The Big 3 are doing fine in these times, with the exception of pay and benefits. It has nothing to do with the quality of the cars. The whole problem is pay and benefits. The union is bankrupting these companies. I hope the companies file for liquidation as opposed to reorg (which they wont do) to bust the Unions.
The Japanese don't pay their workers any where near what the Big 3 pay in indemnity and benes. I applaud the Japanese workers who are grateful for their jobs and pay.
If the Big 3 stopped producing and went into liquidation, the Union would be meaningless as there would be no money coming in at all. Thats the result that I want to see, but I know will not happen.
Therefore, Tyler's article is meaningless as the Big 3 will not go into liquidation or will be bailed out by Bush and the Treasury. Auto sales are down all accross the marked, including Toyota and Honda, as people are now all hoarding their cash or trying to delever. We are at a classic bottom in my opinion on a long view as gas prices are down and that will serve to put more $ in everyone's pockets. As the autos are forced to provide greater rebates and deals, the buyers will slowly, but surely reappear.
The new 1 yr target for Sirius is .60 when I first found this stock it was 3.00+
Now I hope to see .30 again.
Just threw the very last bit of cash onto the bon fire. (I said this 3 times before but this time I mean it....really)
This whole situation is a lot less comlplicated than some are making it. It's a no duh that Detroit needs to downsize and conform to new realities. And yes, just like in any other company or industry, it means layoffs and downsizing--which has to and will happen in time (and which they have been doing now for several years). However, that issue should not be confused at this time with the underlying thread that all three of these companies have in our economy, and which must be shored up IMMEDIATELY. POST HASTE. This screwing around is a result of chumps trying to look like heroes for their stupid constiuencies and peolple thinking they are going to dictate how and when these companies will downsize, immediately and at the snap of a finger (which is fascist)...when they should only be concerned about one thing RIGHT NOW, which is stablizing our economy. Next year, there will be plenty of time within say 6 months to address all of the conforming and restructure issues. GM, et al, know they need to make adjustments and will. Now is not the time to be lumping everything together and all at once. First things first.
Big Autos are as much a victim of CDS, RMBS, credit freeze irresponsibilities (perpetuated also by gov btw) as anyone and while not as critical as banks to shore up, are not far behind. This is ridiculous that we're going through this farce. Lehman was let go to "teach them a lesson" and look what happened. Now the same is attempted to be done to Big Autos. I don't think any of us want to close our eyes and watch this nuke go off and hope for the best. If Big Autos are not propped up right now, you all will wish they had been. The hour is already late. Consumers are at least by now spooked. If you went in to a GM dealrship today, one of your first questions to your sales person has to be, "so are you guys going bankrupt?" That is not where this should be at all. That should have been quickly taken off the table 2 weeks ago. Instead, it's causing more pain and friction to us, everyone, who is buying a car or not. While the media reaps their ratings over this and lawmakers soak in their spotlight, that's what no one realizes, IMHO.
Your comment is at the heart of todays problem. Todays issue, is not about busting unions. It's about helping our economy stabilize, period...and helping prevent further melting down. We are currently unstable. With this in mind, you have two options. say f%ck it, like they did to Lehman, or mitigate the chaos, where in smoother waters (for all) you can deal with the issues and changes over time. No one, at least I am not, looking for sweeping under the rug money while going on without change. We are seeking to avert the kind of further chaos like we just lived through in October and November. What's wrong with shoring up the structure before knocking down interior walls and remodeling? If you have no solid structure, remodeling is futile.
The price is not down due to debt. It is down because of uncertainty concerning reverse splits and dilution.
The shorts are simply cashing in on this uncertainty. Shorts can't hold the price down if the market thinks the price is too low. (and buys)
1. Simply state there will be no R/S
2. Simply state no new stock issued while price below ___
3. Have insiders purchase stock (I don't mean give it to them I mean see them invest their own money in stock and show they are confident in future)
Company could really promote rise in SP by announcing once debt is resolved it intends on repurchasing stocks to lower outstanding shares.
5 percent of revenue put towards this would restore confidence.
No disrespect to you but I can guarantee you SIRI will not be using cash to pay down debt. Their goal is to be cash rich and flow positive. In no way will they be parting with any precious COH to pay debt. IMO.
sl62, I would not be to sure of that. You are not saying that they would rather go into bankruptcy then take COH to pay off debt, that just makes no sense
(in April SP would allow new issue recouping the money spent to repurchase stocks today)
140 million spent in Dec results in S/P of .50 in April where issue of 280 million new shares returns the 140 million cash but still results in there being 720 million fewer shares then in Dec.
Sometime around Oct they repeat the process to help with Dec debt.
The point here for Sirius to take advantage of the .14 SP
The bill before the Senate dealt with paying UAW workers for idle plants / assembly lines. The $150K per employee issue was reported as actually being $105K per employee, but both are ridiculous. In any event it is the legacy costs: retirement benefits, health care to retirees, and pensions, that have driven the margins of these companies to non profit. With the downsizing of the manufacturing and blossoming legacy payments, the auto makers are operating more as health insurance companies than auto manufacturers. This issue was suppose to be removed in 2010, with UAW taking over the administration of these legacy issues, allowing the companies to have balance sheets that would then operate on the merit of auto manufacturing alone.
The collapse of the economy, housing and financial institutions, made this time line untenable. The plan was good but the time line failed. Without further concessions from the UAW and the bridge loan, these manufacturers will never get the chance to retool and be vital to the economy's expansion in the future. As has been said above, part of the retooling will be to change what they manufacture, as well as what they pay people who manufacture these new products. To simply let these modernized assembly plants to go under and sit idle is a tremendous waste of resources. Without use and regular maintenance these plants will fall into disrepair and will not be recoverable. This is all a much more complicated problem, then simply letting them fail. We have buildings that can be reconfigured, people that can be retrained, and an economy that needs the jobs.
If we do not assist, subsidize this industry for change, and simply let them fail like Lehman on the financial side of the economy, we will allow a situation to unfold that will deepen the recession and lengthen the process to recovery.
I beg to differ. The credit lines in May 09, are a base of $250 Mil and an extension of that line of $100M totaling $350M in bank lines and the December 09 debt is the old 1.75% Exchangeable Notes that were renegotiated at the time of the merger with holders to 10% and total $400M.
The important difference other than the totals as you know, is that May 09 is Bank Credit due to expire and the Dec 09 is Exchangeable (Convertible) Notes maturing.
I completely agree with your assessment of the debt needing to be paid off sometime and shares is better than cash. Technically the debt should be considered in establishing SP anyways and IMO, the Street is already pricing it in.
Since market looks forward not back we must see what market sees (or is looking for but cannot find)
The answer is certainty about the reverse split. Since everyone understand investers will never recoup investment after R/S that is what has driven down price and wieght holding it down. I don't think anyone really doubts Sirius will survive. What they fear is their investment will not.
So is SP important to company? Since they use shares to pay debt they should understand they need SP to rise. What legal means do they have to increase price? One is to remove the uncertainy about the future.
That's exactly my point. There will be no need for the use of existing COH to pay debt with new share dilution (which I believe is near priced in the current SP--esentially worthless). They will use funds raised to eliminate debt and make whole people like Howard and his agent. Then with '09 debt gone and existing +Q4 COH in pocket, they will reverse. I don't forsee any lawsuits on reverse issue. As long as their SP will remain under a buck, which is a guarantee, there will be no evidence he wasn't reversing for that compliance reason anyway. The current exemptions and extensions are meaningless to this and could never be proven in court. In addition to that, I wouldn't foresee any lawsuits anyway because in their safe harbor, it explicitly states they reserve the right to change their business strategies according to the current or unforeseen needs of the company. Just because Mel said at one point he will use reverse only for compliance, does not mean legally he can't change his reasons. Their safe harbor says they can at any time. IMO.
Given the current situation, I would like to see the company dilute, reverse, payoff debt and move on. Taking on new loans or refiing existing deals makes little sense after what has happened to the common.
Or I should say, though there could be lawsuits, they would be easily defendable by the company.
Todays line from Five Dumbest Things on Wall Street
Mel Karmazin can't play CEO, so he's playing disc jockey instead.
The Sirius XM Radio(SIRI Quote - Cramer on SIRI - Stock Picks) chief told reporters at the Reuters Media Summit in New York last week that the satellite radio company is reducing its offerings as part of a $400 million cost-saving program. Karmazin said he will decide "the best channels" from now on, taking the best of breed in each music channel genre from either Sirius or XM.
"You as a subscriber, though you may miss your channel, you need to make sure we make money because you want us to be around so we can invest in programming and we can provide you with all these services," said Karmazin, whose company's stock trades around 16 cents a share, giving it an equity value of $510 million.
Yes, Sirius subscribers, Uncle Mel, whose 2007 compensation topped $5 million, says it's your duty to keep his company afloat and his lofty paycheck coming. Not to forget Howard Stern, Martha Stewart, Oprah Winfrey and all the talent he signed to expensive contracts.
What makes Karmazin's pleas most galling, however, is the fact that he sold the merger between XM and Sirius to regulators on the grounds that it would provide consumers with "a broader selection of content." In February 2007, when the combined market cap of the two satellite radio operators was $13 billion, Sirius announced the merger saying, "The combined company is committed to consumer choice, including offering consumers the ability to pick and choose the channels and content they want on a more a la carte basis."
Not anymore. Karmazin is calling the tunes from here on in.
At least until the company's crushing $3.4 billion debt load turns his airwaves to static.
Vote NO and Mel needs to GO!!!
I'm averaged down since the buyout and have incurred substantial losses. I am moving forward and not dwelling on the past and I am currently in a certain strategy of recovery with what's left of this SP--which I've articulated here.
Longer term, you have to look at the bigger picture here. If the company were just reversing to raise ther SP, while hanging on to current debt, that would be deadly. But if they do it as I believe, along with a cap raise through new shares, to eliminate a chunk of debt, the Street will embrace this as a positive. Long-term, this type of move will actually help existing investments to a certain degree--much more than in this current incarnaton...IMHO.
>>Just a couple of things:
The bill before the Senate dealt with paying UAW workers for idle plants / assembly lines...<<
My point exactly. Right now, we have to deal with one issue at a time. Too many are trying to help stablize the economy while also trying to instantly reform Autos' legacy issues. Can't do it that way.
February 2007, the combined market cap of the two satellite radio operators was $13 billion,
Today Sirius trades 16 cents a share, equity value of $510 million.
Mel Karmazin is all static.
Vote NO and Mel needs to GO!!!
In no shape or form is it good for people holding stock when reverse occurs.
since profit results on a per share basis you might have the same value after split as before but potentional for recovery of lost investment is gone.
Remember market looks forward and when it sees a 1.00 stock produced by merging 5 .20cent stocks it sees the one stock headed back to .20 not moving higher. Everyone knows the now lower number of outstanding stocks is going to be increased by a new issue.
The only sound method of avoiding delisting is to raise the SP by increasing buyer demand. Investors need a future to believe in. If that future hints at a repeat of past the market will not be there.
A sound company does not require debt. Without debt the company can raise needed cash by stock issue. (always with intention at some point retiring the new issues)
Personally I no longer have faith in holding this stock long term. I am simply hoping it gets back to where I can get most of my investment back. Following a R/S I can sell knowing recovery is no longer possible.
I'm very interested to see exactly what will happen and we're not far away. Once we're past the meeting, the company will make their intentions known. You could be right but I'm setting up for full dilution while maintaining all cash on hand post reverse and debt reduction. I think Mel's goal is to be able to say to the Street, "look, our SP is 3.50, our '09 debt is gone, we have 19M subs, our CF is positive and we have 500M in cash. You know you want to buy our stock."
I think given this scenario, people actually will want to buy the stock. What would be not to like? And given the trillions that are sitting on the sidelines right now, they may just get quite a few takers.
"Following a R/S I can sell knowing recovery is no longer possible."
Most long terms like me would sell after a RS and take the lose. I predict 1 hour after the split the stock will start falling again. The RS will be the end of SIRIUS as a public traded company. That is Mels Plan...
YOU SAID
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"but I'm setting up for full dilution while maintaining all cash on hand post reverse and debt reduction. I think Mel's goal is to be able to say to the Street, "look, our SP is 3.50, our '09 debt is gone, we have 19M subs, our CF is positive and we have 500M in cash. You know you want to buy our stock."'
---
If your prediction is true, current stock holders would have a case against Mel and company. This is part of the RICO outline that is bouncing in and out of court now. Mel plan does not protect the intrest of stock holders. It is his plan and he could also go private and add to the case.
If your prediction rings true. SIRIUS will be sied to death. I prommis you.
It is in the Mike H RICO. Glad you are starting to see the light…
Most of us agree that the stock price is lower than any had expected. There are a number of external reasons as outlined over the last few weeks and months in the general economy and availability of credit, for its decimation. With 1.1 B in debt due in 2009, I think that we can all agree the uncertainty about that debt's financing, the proposed dilution and RS, distrust in current management's intentions, and the automotive industry's future, are the direct influences on the current SP because of the long shadow these unknowns cast on the company's survivability.
Uncertainty is by far the biggest enemy of all company's, and Sirius is no different. On next Thursday, Dec. 18th, Mel and the management team of Sirius have a shot at bringing certainty to some of these questions. If they do not use this opportunity to build investor confidence by stating their solution to the debt issues through dilution, this stock will trade as though Bankruptcy is inevitable. The time for keeping investors in the dark will be over. Simply winning the authority to dilute shares and RS without an announcement of a concrete plan will take this stock to .05. The rush to get out will give the shorts all they need to solidify their positions. I believe that it will come down to the annual meeting. A reaffirmation of Mel and the Board's commitment to the common shareholder, or a continuation of the exploitation of shareholder loyalty. IMHO. I am betting (gambling and I hate to do this with an investment), the Mel will send the shorts scrambling with solid performance announcements.
It's clauses like this one from the 7/30 424b5 that makes me belive what I do:
>>We may from Time to Time Modify our Business Plan, and these Changes could Adversely Affect us and our Financial Condition.
We regularly evaluate our plans and strategy. These evaluations often result in changes to our plans and strategy, some of which may be material and significantly change our cash requirements. These changes in our plans or strategy may include: the acquisition of unique or compelling programming; the introduction of new features or services; significant new or enhanced distribution arrangements; investments in infrastructure, such as satellites, equipment or radio spectrum; and acquisitions of third parties that own programming, distribution, infrastructure, assets, or any combination of the foregoing.
To fund incremental cash requirements, or as market opportunities arise, we may choose to raise additional funds through the sale of additional debt securities, equity securities or a combination of debt and equity securities. The incurrence of indebtedness would result in increased fiscal obligations and could contain additional restrictive covenants. The sale of additional equity or convertible debt securities would result in dilution to our stockholders. These additional sources of funds may not be available or, if available, may not be available on terms favorable to us.<<
>>The Combined Company’s Business might never Become Profitable.
As of March 31, 2008, on a pro forma basis after giving effect to the merger and the Refinancing Transactions, the combined company would have had an accumulated deficit of approximately $4.5 billion. The combined company expects its cumulative net losses to grow as it makes payments under various contracts, incur marketing and subscriber acquisition costs and make interest payments on its existing debt. If the combined company is unable ultimately to generate sufficient revenues to become profitable, it could default on its commitments and may have to discontinue operations or seek a purchaser for its business or assets.<<
And my point is, if this dilution and reverse are part of their strategy change, or if they deem this is what will keep them out of default, they are well within their rights to do so. These types of clauses are above and beyond and standard boiler plate safe harbor...yet I include them in their cumulative safe harbor protection. I have said before, from my readings, I feel they have left few stones if any unturned legally. Suing them for reasons many including Hartlieb have cited will have a tough time...IMO. In many of their recent 424b5's, they all but tell people that 'you're an idiot if you buy our stock due to the cited risks'...
Who has seen:
-Last weeks FCC investigation report slamming SIRIUS and the FCC,
-RICO documents on the SIRIUS XM Merger,
-Fed judge kicking law firm out of state for being part of SIRIUS suing SIRIUS to get protection from stock holders.
-Past lawsuits against Mel building Viacom, destroying stock holders in the past?
LOL go ahead and think positive.
Call Mr. Madoff and you can buy into his 50 billion PONZI.
Well said...shortly we'll finally get to see what 'ol Mel has up his sleeve! Can't wait. And I've got 263M reasons for hanging on to my tickets lol...which is about all that's left...
sl62, That is exactly the boiler plate statement every company puts out. It still does not stop class action law suits from being won. As said there are many examples of class action law suits being won because a CEO made a statement that was totally false. While I will agree that if they do it while the PPS is below a buck there would be little that anyone could do. They may get a judge to here it but it would end up losing
I can't wait until Autos gets their rightful financial support from the TARP, thereby making the senate look like a bunch of clowns.
It was his plan to fund the merger with our money. We have evidence outlined in the RICO against Mel. Now the FCC investigation is added to back up all the allegations and even add collusion.
The best part, because of this pressure, Mel could reverse his plan. That is what I pray for to happen. Just let this SP go to $ 2.30 and I am out of here…
resadmin.uah.edu/aama/...
If you want to understand why Shelby is so against the bailout check out this organization in Alabama, and three key members who provide almost 900 M sq ft (.9 B sq ft), of Manufacturing of autos in his fair state. Honda, Hyundai, and Mercedes Benz come to mind.
163888
Your probably right but, failing that kind of transparency, this stock isn't going anywhere fast.
For guys like me, it does not matter if the RS happens or a BK. The bottom line is total red ink. Mel could avoid my future planned lawsuit with a BK. I would rather see Mel in jail via the RICO.
Most of us would rather see Sirius BK than see Mel start the shorts again with the RS. This RS thing will just give Mel more millions for his thieving friends…
Will Mel every try to get real financing? NO, not unless we turn up the heat on him…
On Dec 11 02:32 PM Thadeus Thornton III wrote:
> Has anyone else noticed how "Alpha" is flooding Yahoo finance with
> so many articles from questionable writers with dubious credentials?
>
>
> I'm not even even going to respond to anymore of these "Alpha" self
> appointed "expert" journalists. It has become obvious to me that
> this outfit has recruited a number of writers who, perhaps, just
> want to establish themselves and are being used to get "Alpha" on
> the map. Maybe a sign of the times. Starving journalists and out
> of work financial advisers or previous bank people looking for something
> to do writing drivel to exploit the sad business climate we find
> ourselves in. I guess there is always someone looking to make lemonade
> out of..... But I think Alpha is still just holding a lot of lemons
> and hasn't learned how to really make any really good lemonade. In
> my humble opinion :)
Thanks. Yeah, no surprise. I have been reading this week more about something I have not seen happening because it's been going under the radar. As you point out Shelby, Alabama, Corker, Tennessee (who just got that new VW plant approved this year), and others in the south have been quietly luring in foreign auto. Clearly this is their attempt at redemption frm losing the Civil War...and though that sounds funny it's real IMO. They're still po'd about that. Notice the name of one of the dealers from your link...Confederate Motor Company. Apparently Shelby and Corker, et al really think "the south's gonna do it again!" F those guys lol!!
You have lost sight of your reason for investing in this company. Your familiarity in speaking of Mel makes your motives sound personal.
I feel the disappointment of a bad investment decision, and foolish in my lack of knowledge regarding the impact of the type of XM debt taken onto the company's books at merge. The thing is, it was my decision to stay in, rather than cut my losses and get out in August. You and others have simply lost objectivity and refuse to take responsibility for your bad investment decision. Your statement of preferring Bankruptcy is outrageous and a further sign of your personal attachment to this company's failings. Bankruptcy would only serve the company in eliminating or restructuring it's debt, while most likely wiping out the rest of us common shareholders. It would accomplish exactly what you say you and your group are trying to avoid. You continue to post half truths about the events leading us to where we are now, as has been pointed out to you before. Yet you continue.
You would have more credibility if you would look to your own decision making and focus less on everyone else. The recent cancellation of your scheduled hearing, while not an outright dismissal, is certainly a sign of the weakness of your evidence. I respect your right to try and wish you luck with your hardships, but I cannot support your motives.
>>Notice the name of one of the dealers from your link...Confederate Motor Company<<
I meant manuacturers. And apparently they make bikes (kind of interesting machines actually). But the name is interesting in the context of my point...Shelby regardless of his politics and sympathies can still kiss my arse...
Later. yes, good theater just up ahead...
Yes, Confederate makes very interesting motorcycles but have you checked their prices?! $60K+ is their cheapest bike and their Nieman Marcus only special edition Fighter goes for $110K. Gaaah!! I'm a motorcyle owner/enthusiast, but those prices are crazy!
I see the course we are on as the best given the current conditions. I will not go into the Perfect Storm scenario that has gotten us to this situation, and as we all know there are storms to come. If you haven’t figured it out yet, the course is to pay off debt with additional share issued, i.e. dilution. (Btw, 16388, I have a nit to pick with you here: it’s “dilution” with an “i”, not “delution”) And I agree that it’s not the end of the world, and is the best chance that we as current shareholders have at recouping our losses/making a profit (assuming you’re not in at a cost basis much above $1). Given a dilution strategy that takes care of 2009 debt to make the balance sheet look better and a hopefully recovering economy we should see some light at the end of this very long tunnel.
But my previous question in another thread went unanswered, which is: exactly how much money can Sirius raise with a share offering now or next month given that the current SP is hovering at $0.15? Using the requested 3.5B shares would not raise enough capital to take out even half of the 2009 debt while diluting our shares 50% . . . yes, we may be able to push the May debt assuming there is FCF, but the debt demons come around again by EOY. At which point raising further cash will be very doubtful.
The real question is how low can the SP go. If you take the assets of the company, I figure what, about $2B for the FCC licenses, say $2B for the satellites and other assets, and $350M COH we’re looking at about $4.35B in assets vs. $3.4B debt. Let’s use $750M net assets assuming other current liabilities, which should give us an SP of about $0.21. That already puts us below market value right now. We would need investors willing to pay a slight premium assuming debt is under control and the revenue stream is stable and hopefully still growing - say $0.30/share for 2B shares to raise $600M. This would give us the leverage to push the May debt, handle the Dec debt, and continue gaining strength. We would be diluted, but in a position to raise SP none the less. IMO RS and delisting plays no role in the equation unless the SP remains under $1 very late next year.
I have been buying some stock at these prices to average down a little and to build up a nice portfolio after the R/S takes effect.
I will meet with my broker to discuss the proper way to short the stock since I believe that absent any positive news at the meeting, we as shareholders must face the prospect of shareholder dilution. I think its inevitable due to the present economic circumstances. I don't see how Mel can refinance the debt otherwise. Truly Bank of America and Goldman did a real hatchet job on this company. I think they made this company toxic and its such a shame. I think it will take years before this company becomes the darling of wall street again. What a shame,this is an American company with a technology that was created here in the United States by an American.
Believe me the thought of shorting this stock goes against everything I believe in and it just seems so dirty, since I would have preferred to participate in a shareholder rights plan where we would refinance the debt and eliminate it, all of it. Our payoff would come later, say in 60 months with a large stock dividend, in the interium I would be happy with a variable return tied to LIBOR. I don't think such a shareholder plan is in the cards.
That said I am very disappointed in Mels day to day operation of this company. I also believe that he has had to spend a significant amount of time dealing with legal non issues which have been created to destroy what's left of this company, for example the HD Radio inclusion debate pending in front of the FCC.
This concept that SAT radio must include an HD receiver in its product is beyond incomprehensible; it just shows how far our country has gone downhill. Of course no one is suggesting the converse. The idea that this is being proposed because its necessary to improve the lot of rural people is laughable. Of course this is free radios response to the merger approval. Still it has to be distracting Mel from the day to day operation of this company.
I think that Mell should have taken a good look at some of the contracts that were made and immediately made moves to redo some of these contracts or at least made it clear to shareholders and the Street that he would get his house in order by terminating some of this dead wood, for example what genius gave skier Bode Miller SEVEN MILLION DOLLARS FOR THREE YEARS. Can anyone justify Martha Stewart earning NINE MILLION DOLLARS per year for a channel that no one is listening to?
Oprah's contract with XM was disgraceful, how soon we forget what Howard said when it was announced that this was like giving money away because Oprah isn't a radio personality and doesn't know how to do radio and wouldn't attract listeners, that XM wouldn't achieve anything from this signing because Oprah didn't know how to hold a radio audience and he was right.
These two channels are reallly niche channels, I think if shareholders knew the true numbers that would question the necessity of these decissions. Couldn't we have achieved the same subscriber growth without throwing away all this money on unprofitable channels?
I would like some clarity on these issues from Mel maybe we can get a sense of where the company will be going with personality driven radio now that Howard may not re up for another contract, and hopefully he can change the direction of this company, by getting people who can produce subscribers and hold an audience and gain a following, so that maybe we can have some of the niche stations back that went after the merger.
The comany needs a buzz again, this company provides the greatest entertainment bargain in American history. I hope this meeting will go a long way in illuminating the future. I hope that Mel can rise to the occassion, and to the challenge of running this company going forward from here.
Hope to see you guys there, you make my day with your thoughts and comments.
The DOW is sick....On life support right now...Next week should bring it back to life when it hits 7500..7200..7000 or 6500, very very very small chance it may hit 5500....I am actually looking at 5500 at the ultimate market low to be achieved sometime next year after june....
Sirius stock be much higher by March.... I have no price target.....I would gather a guess from mid jan to march this stock may be trading at .50 cents again....Depends on a lot of factors....There will be movement on this stock at some point, as it simply has to move...They are lulling you to sleep right now....
Hope things are well my friend... You and I are more aligned as is Bababooie to the down side as a result of deleveraging and inadequate long term government intervention. Pumping the liquidity in put some air in the parachute on the way down, but down through deleveraging and mark to market accounting is still happening. Intervention on these items are not effective.... Its what I was referring to above @ 11:06 am on Friday. Oh well Good luck and Happy trading.
Read your post above and I noticed a couple things that I think you might be overlooking. The company itself does have a relatively low COH as reported in the 3Q, but it is not stagnant in its ability to generate cash moving forward. The 3Q results glazed over a very respectable reduction in expenses and increase in revenue with several other items highlighting the report. The fact that the company took a Goodwill Charge of $4,751M and an added $39M in Depreciation, for a total One Time of $4.79 B in the quarter, due to a re-assessment from to the merger, masked an otherwise remarkable 3Q and 9 month performance. That's also not including legal and other related merger costs that were thrown in for good measure. That still left them with $359M of COH. Removing the mask of the reassessed expenses showed the following:
Total Rev. 2008 (9 months).................. $1,042 M
Total Rev. 2007 (9 months).................. $ 672 M
Ttl Op Exp '08 (9 months).................. $1,235 M (minus G.W.)
Ttl Op Exp '07 (9 months).................. $1,036 M
Net Loss 2008 (9 months).................. 194 M)
Net Loss 2007 (9 months).................. 363 M)
These numbers in the third quarter of 2008 also include 2 months of XM's expenses and revenues since the merger. It is clear to see that even without the merger, Sirius was reducing expenses from operations while increasing revenues. 3Q numbers are very hard to read as presented because they include one time merger charges, goodwill write down and added depreciation write down for 2 months of XM assetts. They also include the two months of XM rev and exp info that make YOY #s difficult to extrapolate. You have to admit that they look good reducing their Net Loss by 169M in 9 months YOY, and still showing a decent COH moving forward. Their net loss from 9 months of operations is 54% of their COH of 359M. This is remarkable considering the merger synergies were not even close to being fully in place on Sept 30th when the quarter ended. I would expect that even with the slow down in 4Q which was, puzzlingly reported by Mel in the 3Q Conference Call and projections going forward, that COH will grow. In addition, 2009 Revenue projections for the company, on the high side, are $2.7B or $675M per quarter. I am not that optimistic, so I used $2.2B or 550M per quarter. By the way don't forget the 4Q revenue 2008 that is being taken in by Best of Both, an addition $48 / yr / sub and an automatic subscription reset (with prepay). That's cash not yet in the numbers. Add these numbers to your application for financing, along with an excellent credit payment history and partners who already own your debt, 350M in May and 400M in Dec 2009, might be willing to extend rather than expire the May credit facility and renegotiate the Dec 2009, 10% Converts due to mature. (where are you going to get 10% as an equity holder with treasuries at a negative net return).
I do not want to be a pumper here because that is not what anyone needs. As shareholders we have all, on paper, lost tons of equity in this company. With further dilution and a RS authorization at hand, it is inappropriate to be optimistic at this time. We as a board of concerned shareholders have not looked at the numbers of this company in a while and I know there will be plenty of time after the meeting to do this. This company is not now or has it been in the past headed for Bankruptcy IMHO. The numbers and improvements in operational costs have been on target in spite of the Perfect Storm. I still feel that for some investor, at some time, this company will be a profit making, cash generating machine. Unfortunately the question at hand is will current shareholders join in that success.
I myself will not be attending the annual meeting. My votes have been cast and my fate will be determined by the outcome and decisions on how to use the authority given.
As much as I agree that Goldman's Weinke, and finally BAC (Merrill's ) analyst took the stock down, I really believe they were just the weather men reporting on the problem, not much analysis and a lot of insider information available. Currently the amount of Common Shares held Short is around 263M, as reported by s162 above, and this link:
www.shortsqueeze.com/?...
That's almost the exact number of shares that were lent on July 28th to assist in selling XM's convertible notes. This is what took the price of the stock down along with all of the other financial events and auto make melt down news. As far as Shorting the stock goes it is perfectly legal and under normal circumstances when backed up with located and acquired shares helps to set a good balance to company's equity values. IMHO. So short away with good conscience knowing that downside gains are limited by $0 and the upside losses are unlimited. As with all investment strategies their is risk and shorting stocks is no different. Good Luck and enjoy. Report back on the meeting if your attend.
cos1000,
My numbers where very rough based only on what the current financial information and does not take into account growing savings, growth or drop in revenue, positive FCF, etc. It was just my admittedly poor attempt to determine a reasonable book value and what amount of money can be raised with a share offering now. I agree that we stand to see some substantial improvement in the Q4 numbers, but I also don't want to be a pumper and just want to have some hope for recouping losses or even making some gains in the near future. I was shooting for my numbers to be conservative and hoped to have some basic accuracy, but nothing more than that.
Unfortuntately I won't be attending the meeting. I would have loved to hear the "crickets" while Mel and Board attempt to justify this SP to the room. Or maybe there will be too much shouting for crickets. No doubt people have questions and will demand answers. Most likely though my guess is Mel will blame the SP and Market Cap on everyone but himself and the Board (aka management). Judging by his ridiculous comments this past week that people need to suck up the channel changes so he/they can still have a company to run (aka a job). That's pretty ruthless and crass right there to say, while he KNOWS people are hurting both from wealth armegeddon and now getting their favorite channels taken away. I actually had a boss like him once. Once.
Imaze, would have been nice to meet in person but in lieu of that, if you do go, I'm sure you'll post your observations. The meeting starts @ 9A so I recommend you get there early as I doubt they will be letting in more than a a few handfuls of non-institutional "commoners." Plenty of big boys will be there looking for answers and will be given priority...and they already said the hall only holds so many. I looked on their website and didn't see that they are webcasting (why am I not surprised!)...so I'll just look for write-ups. My guess is Tyler will be there, if for nothing the media side, and will give us a run-down.
One last thing per your post. If you are looking to short this stock, you will currently be unable to...due to that the SP is non-marginable to your broker. Only stocks $5 or over can be shorted by the general public. Once the reverse happens, with all the debt paydown, I don't expect the stock to be anything over 3.50, so there will be no opportunity there either...sorry to say. Had we all had that chance, we all would have created a short hedge at least when the thing got to $1. But then again, that would be a fair playing field...and joe the plumber (or six pack lol) doesn't get that luxury.
Good luck!
Not a problem at all... I was just giving more clarity to what I believe is a very confusing reporting for the company. In Q3 because of huge Goodwill right down, the addition of merger costs, and the adding of XM's two months of operations, there isn't any YOY comparison available. As you know, when their is confusion in the numbers, the analysts will take the company's numbers down and, in this case, accentuate that confusion as even more negative than they are. In reading articles from non supporters of this business' model, you can see how picking and choosing numbers to further their agenda of bashing the company has been used. I just wanted to point out that this company has been on the right track for reducing costs and adding revenue before the merger and it is continuing to do so now.
They have just recently renegotiated with MLB to get the Home Plate channel included in the B of B for Sirius subscribers, as reported by Tyler Savery, on his website Siriusbuzz.com this morning. The details of the $120M in escrow are unknown right now, but the extra dollars from Sirius subs to pick up MLB will be another cash driver. If they can cut in half the escrow required that will also be a big deal.
At the merge, Sirius used $200M in COH to pay some of its debt that was due in May 08 and June 08. It is possible that the $210M or a good part of it, say half, will be taken out. The May 09 debt only needs to be renegotiated with the banks and then extended. The Dec 09 debt doesn't have to be dealt with at all right now. The upcoming dilution and RS could be put off from being used to pay down any of its debt until after the second half of the year, when operations and the automaker situation have more clarity. Building cash through excellent operational management, while building customer goodwill, will be important over the next 6-8 months.
Happy Birthday to you and a prosperous future!!!!!
As far as adding to your position before the meeting ...... its a spin of the wheel, roll of the dice, luck of the draw type of move write now.. There are a lot of places to put money in the market on good timing with this volatility. Sirius is a big ? right now.....
You could just as well call it "blunder money" 4 billion in blunders last year. That's why they need a R/S and dilution. They are just a little too free with other peoples money. I don't really think there is all that much "Goodwill" in that 4 billion +
Hmmmm. I'm a little confused by your post. Dow 6500 next week (outside chance of 5500)??? I don't see it. This thesis could only be supported by some new major catastrophe. I am actually very encouraged the last 10 days of trading by how sentiment has turned positive and bad news seems clearly baked in. Further, we have tested the Oct 10 lows twice now (that's now essentially a tripple bottom). Again, short of a major unheavel somwhere here or around the globe, what would prompt a short trader to believe the 4th time would be the charm and to break through the current bottom at that (as your suggesting)?
Obviously Q4 reports will be dinged a little and could cause continued range-bound volitility but lowered forcasts have already been released. That's what we just went through. Estimates have already been revised lower and stocks punished. I can't see things being that off target. The maket is already looking at Spring, where again, short of more banking or similar catastrophe, we should be out of the woods to your predictions. Not necessarily on a rocket, but out of the woods. Inflation will be a problem if not carefully minded as we get into summer--rates wil have to begin to rise sooner than later. Someone said here that the consumer is dead. The consumer is not dead. I just heard a report yesterday that online sales are on pace to be higher than last year. And I believe it. They say every year that sales will be below last year and then they never are. Banks are not being so quick to lend because they are trying to wait until they see their CDS overleverage will not come back to haunt them. I know that area is generally still a question-mark ...but for now we're holding. If they can get the clearing house up and running for counterparty risk, that will help ease.
Right now there are trillions on the sidelines waiting to come back in to equities. For those managers who have been out now and getting not so much out bonds, they will sooner than later have to recommit...if they don't in the next few months, where are their profits as money managers going to come from? With clients used to 10%, at some point very soon, they are gong to have to capitulate. I think we're starting to see it. Slowly. But as it heats up we should start seeing more up days than down. My guess is they might wait and in January see how the first wave of Q's come in. How can those surprise at this point? If you're a company that hasn't already guided down, wtf, were you waiting for. We've got new leadership next to in--which the market likes and as long as gas stays about $2 for a while, the consumer will hold up...I say the bottom is in (for most of '09 at least). IMHO...
>>A bigger hurdle for cash-strapped Sirius XM will be refinancing $1 billion in debt that's coming due in 2009, including $210 million in February. In recent weeks the company retained investment bank Evercore Partners (EVR) as a financial advisor to help in the effort, according to Debtwire, a financial news service. Representatives of Evercore and Sirius XM declined to comment on the report.<<
www.businessweek.com/t...
and this..
More Trouble For Sirius: Howard Stern Threatening To Retire (SIRI)
Eric Krangel | December 12, 2008 11:30 AM
As if things couldn't get worse for Sirius XM (SIRI). Now the satellite radio company's biggest star, Howard Stern, is telling his fans he won't re-up his contract.
From the howardstern.com recap of yesterday's show:
IS THE END IN SIGHT?
Howard took a call from someone who asked if Howard planned on re-signing his contract with Sirius when it ends in two years. Howard explained he was pleased to do the best radio of his life, but thought he would be done at the contract's conclusion: "This is my swan song." Howard added that he looked forward to just spending his days with Beth and believed she felt the same way.
www.alleyinsider.com/2...
This Stern bit, IMHO, is why Mel pushed this buyout through on our backs. Just as Sirius Satellite Radio, Howard goes bye bye, so dsoes the company. Now as a combined company, they can lose Howard and survive.
What do you make of that Evercore blurb? First I've heard of it...
this is all I have on Evercore:
The company offers strategic and tactical advice to public and private companies; advises clients that are contemplating the sale of certain businesses, assets, or their company; provides advice for special committees and boards of directors; and offers financial advice and investment banking services to companies in financial transition, as well as to creditors, shareholders, and potential acquirers, as well as serves as an independent and objective adviso...
I don't really know. I haven't heard of them being used before this and they do provide a wide range of services to companies public and private. I read that article yesterday and became more frustrated with Harlieb's quote on P2 , last paragraph. This is the kind of consequences, bad PR, that comes from the Save Sirius group in their noble intentions (sarcasm). Its just not good for shareholders.
Howard is posturing around this Bubba thing is my guess. He is a businessmen before all else..... Instead of helping the pps and earning his outrageous contract price, his timing is to come out at this time and rumor or announce his retirement. Its just more of why I just don't like the guy. Narcissism runs deep with him and that just turns me off. The company needs to be silent and let him do all the talking so that it is not perceived as a conversation with management. IMHO.
Like you said ........ Let the Drama Begin....
Well, this Evercore thing certainly makes things interesting. I've never heard of Debtwire either until now (sub-based)...
www.debtwire.com/publi...
But if true as reported, it's the first incling of ANY KIND we've gotten in this whole mess indicating the company might actually doing some sort of TANGIBLE due diligence beyond the share dilution. As a result, we've been punished on the Wall Street SOP of no news is bad news. It would be pretty incredible if this stock made a squeeze beeline on some 11th hour announcement, wouldn't it? Maybe if it timed with Autos announcement this week? Who knows but as said, I currently have 263M reasons to still be interested. A good part of that still needs to be reconciled. Even redemption of only half creates fireworks.
Yes, this week will be all drama, all the time!
And I totally agree on the MH/SS distraction. WTF! We'll give them 1K, 10K? That's f'd up. You're in or you're out. They're trying to be both.
They have been quiet about how but, not that they will take out the Feb 09 debt. Maybe a little talk on the street that their looking to take out more than Feb will make staying short a nervous place to be. At these levels I agree with you that if the shorts lock in profits and the autos are loaned (which Bush said they would do), I think your scenario of a push between now and the meeting and the meeting and the end of the year with some news is completely possible. As I said above though it is a gamble and my positions are locked in for a front row seat to see the drama play out. Good luck and keep in touch.....
killerkaul, HAPPY BIRTHDAY
cos1000, I may have to get back in the work force again, This sucks, cant get a good enough rate on CDs, and the dividends are all getting cut.
Maybe tomorrow you'll get a birthday present from the Street! Wouldn't suck....all the best...
CNBC just had an interview with a dealer/owner and she said all her customers ask her about the possible Autos BK. WHY ARE WE STILL WAITING FOR ASSISTANCE!!!! I heard this morning it's because of Chrysler and them being privately held...but c'mon. The math is simple. Every day these idiots wait, Autos are continuing to be hurt by low consumer confidence in the industry. Go through the books AFTER you guarantee some level of assistance! Duh.
For the first time in a very long time...., with much dismay I might be joining you at the car wash my friend..... Haven't had to report for duty in a long, long time... My small business doing contracting and some high end construction has gotten me through.... Cash flow is killing me and I never thought I would have to carry for over 15 months. The DSX yields are just a indicator of more problems to come. When these guys pull the dividend in there are huge problems ahead. Their going to have to live on reserves ( as I have ), and they run out..... Oh well, who thought that a very smart Democrat from Illinois would be the one to have to pull us out of this???? The good thing is we know we can do whatever it takes to get back in the game and keep the home front strong. That's that military training talking.... old but still strong.