Analysts' Zero is the New 'Buy' 45 comments
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BusinessWeek's Aaron Pressman sees a trend among Wall Street analysts (who in past downturns were curiously unwilling to slap "sell" ratings on failing stocks) towards the big goose egg. Predicting a stock is going to zero, which he says may have started with the collapse of IndyMac (current price: about 2 cents), is taking off:
Now "zero" ratings are proliferating. RBC Capital Markets analyst Mark Sue slapped a target price of zero on telecommunications-equipment maker Nortel Networks; Deutsche Bank analyst Rod Lache says General Motors shareholders will have worthless stock certificates within 12 months; and Henry Blodgett (sic) thinks satellite radio provider Sirius XM is headed for bankruptcy. Analysts at Morningstar say the shares of 32 of the 2,000 companies they cover are likely to become worthless.
Analyst estimates are notoriously unreliable, of course, so don't expect every stock with a target price of zero to go out of business. But many recent zero-rating recipients are indeed in dire straits.
He outlines a few including Nortel Networks (NT) and in the comments Pressman links to Morningstar's stories listing a few of the names on the way down.
It's mildly funny that analysts are issuing "zero" ratings now, since by the time most formerly solid stocks hit that level a change to the price target is pretty much the canary in a collapsed coal mine. Investors who need some sort of road sign at that point should really be watching debt levels, liquidity and other measures of simple solvency.
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This article has 45 comments:
some one is manipulating the stock price. once these people are exposed or flushed out like rats, then things will go back to normal. the stock market is broken. you can't give mel tools in a broken stock market. No RS no dilution, until things clear up with the restoration of the uptick rule and a new capable SEC chairman.
Market is going generally up now for 3 months....
Target commodities and gold mines...Banks will recover nicely too, just dont pick small ones that might go under...
- Auto Bail out? Yes. UP..
- Rate Cut? Yes. UP..
- 18th? Urr Urr. Down and POP.
2. Motley Fool, 4 Predictions for 2009, Sirius XM Radio (Nasdaq: SIRI) won't go bankrupt.
3. Santa Claus, sic will go bankrupt on 25-DEC-08
The conjecture on this stock is over. This yahoo can print this article to be incendiary all he wants...he's a little late to the party...(sorry bud). Fortunately, we are about to end all this drama of the last 3 months on Thursday. We know know Mel and co. have been talking to Evercore and gettng ideas. Maybe they can open doors. Libor is down again to 1.84. Who knows what is about to happen but..as we know the company has now had more than enough time to come up with a strategy to deal with their current debt issues and I don't believe for a minute it is BK. And that strategy will be (should be, better be) at least revealed Thursday. Not implemented, but revealed. And this has been going on too long for a strategy not to already be in place and ready for announcement. If you don't have a plan by now, that would be mismanagement to the nth degree.
So soon the clowns around town can take SIRI off their persecution list and we can move on.
>>Companies That Won’t Make It Through 2009 (HMC)(SIRI)(AIG)(FRE)(...
2) Sirius XM (SIRI) has traded under $.10 down from a 52-week high of $3.89. Reuters has reported that "Sirius XM faces some $1.1 billion in debt in 2009. Of that, about $300 million comes due in February." In the current credit environment, that probably won’t happen. There is a theory that falling car sales will undermine the sale of Sirius subscriptions. The company says that it does no better than break-even in the first year it gets a new customer though GM. But, a shrinking subscriber based is not good news for the satellite radio company’s future. Sirius will be out of business, perhaps before mid-year. Who picks up the pieces? The logical choices are a healthy car company like Toyota or a satellite firm like DirecTV. <<
This article somehow never made it into SIRI's mailbox on the 13th. I got it from CHTR's, who is also reeling in debt issues. But notice how Doug looks at the SP profile and sees .08 as the 52wk low and he confidently states (and misleads readers) that the stock has traded beloww .10. Uh, yeah for a mysterious one trade spike last week. By no means is this accurate or fair as he makes it look like it was under .10 for longer as bid/ask.
For the full article go here:
www.247wallst.com/2008...
You may love or hate Mel for what has happened to shareholders. But where BK is concerned, you might as well love him, because that will be the day when anyone watches a company led by Mel Karmazin file for BK. He's way too vain for that, people.
You have to remember this stock is in a world of its own. And that world only sometimes connects to the broader market. If you were watching right after the Fed decision, they tried for a second take down--pinning the needle consistently @ .1400. Normally with that amount of concentrated selling pressure, it should have broken into the .13's...but didn't. The more days we hold .14 in earnest, the better. We did open BRIEFLY @ .137 late last week but that was one or two trades and that was residual from a pre-market takedown. So this cannot be counted as breaking the resistance. Breaking means, a clear break for prolonged bid/ask. If we hold .14 today as it appears, it will be day 17 since that low was made. Now. We have the meeting news upcoming. And we have Autos bridge news from the Treasury (TARP). This delay in that announcement is making things extremely interesting.
To answer your question regarding shorts...the answer is everyone. Shorts are locked on the debt jock and nothing else...esp. since it concerns the very survival of the company. The first squeeze on this stock happened @ 21, where auto programs were clearly triggered. Shorts learned from that and lowered those triggers to .10 is my guess. So they are set up for the worst first and nothing like this Fed news will cancel that. It's SIRI's move. They need to come forward with a plan that proves to the shorts they are at risk...meaning that the company will survive this debt crisis. If they don't, the shorts won't cover until the .05 that BK brings. Why should they cover @ .14 when they (and practically the entire Street) think there might be another dime in it for them? They are not stupid here and won't see a need to give in until they KNOW there's nothing left.
My take is something positive is going to break on this stock very soon. They have basically had nothing but bad news now for almost 4 full months. As I've said before, unless you believe the thesis that they are headed for a total meltdown and land in BK court, you have to believe that the "counterparty" to those 4 straight months is close at hand--as nothing lasts forever either up or down and eventually must change. When I look at a 1 year chart, I see what looks like a bottom being put in. Now the company needs to respond and as Mel once said in front of god and everyone "make the shorts pay." We're soon to see if he was SIRIUS about that or what.
I just grabbed another 2K shares @ .1410 and have my last powder for any volitility on Friday. I have to believe they are now waiting for the meeting to reveal their strategy for debt issues. Or who knows they could throw a piece of meat out there tomorrow. Otherwise, Thursday by noon the word will hit the wires. I'll say this. If they DO NOT reveal such plans on Thursday, this stock will close @ .10 that day (with an intraday of .08). To me it will be unconscionable in this circumstance given the amount of time they've had to draft a plan, but hey...Mel is Mel and he apparently does what he wants.
And yes, as I've written this they closed above .1400. Paulson is on CNBC right now. Let's see what he says about Autos.
A little quickie .15 popped in late to close the day. Don't underestimate this stock's still ability to move quickly. So many have given up. Anyone still here are taking the patience test.
I read zero doubt in that answer.
It is probable the ultimate plan may be to take Sirius most likely to zero. You dig?
Since you are guessing so, wish that Mel is thinking opposite what your are thinking.
Wish that Santa Claus has some good news for both well wishers and enemies.
I think there is way more here than meets the eye and will prove favorable somehow for shareholders who remain diligent. 0? You don't really believe this stock is going to 0 do you? If you do, that's fine but I don't. Most who do are generalizing only by what's in front of their face. They don't follow the stock every day like some of us. For example the stand at .14 today, mid-day. And witness 24/7 Doug A-hole McIntyre...who confidently states in his recent smear that SIRI "has traded below .10". While this was true for one stray trade spike last week of .08, by no means is that indicitive of a legit bid/ask trading range. And (other than the first :30 of trading on 12/12 where they opened At .13.9 and recorded one other trade @ .134 coming out of a premarket mini-takedown) not only have they yet to bid/ask below .14 intraday, but have never closed below .14 either. So Doug's an ass and because he's determined to prove he's right for the past year claiming SIRI would BK, he's compelled to look as far as his nose and say, hey look, it quacked, it's a duck". Duh. This is common with many "pundits" following SIRI. They all say the same boring mantra. Blah, blah, SIRI has 1.1B in debt due in 2009...good gosh, how will they get past THAT hurdle? Lions, tigers and bears, oh my. Or weakness in autos will hurt their subs...you know the same boring sh%t over and over again.
Listen, I know a few things and one of them is: when enough people all wind up saying the same negative general thing over and over again ad nauseum, with nothing new ever to cite, you know it's not as bad as it looks and often there's a lack of intelligence at the root of it. SIRI is not Circuit City, not Charter, not AIG, not Fannie Mae, not the Tribune, not any of these. As you say, they are not a company that issues misleading press releases either (which shows they are not desperate). If anything, I think it means there is more going on than meets the eye. This company is approaching it's day of reckoning. We shall finally see what all of this has been about. I think more and more it has not all been in vain for those who remain.
Hope all is well otherwise...
Free Money FED 0% makes the effective bank rate 0.18% official.
If Mel does not fund this debt now it means he never had any plan to finance and stock holders were always the patsy.
This POP on fed rate cut is a market joke. As for 09 markets, Citi got out of China and some say that is because the US debt held by China is going to drag them down. I see very bad 09. Enjoy this last few months before the very big crash. IMHO….
The ALS (one fo my favorite Zep tunes btw) was just before and not long after the Fed decision. Several million shares came through pounding .1400...yet it held both times. Could be meaningful if it holds up through the next few days. Tomorrow will be interesting as the day before the meeting. Let's see if they try to take it down.
As far as manipulation, it's really no different than any stock IMO. Every stock is manipulated according to the wills of those with the upper hand. Classic bears/bulls. When heavy orders show up either way (buy or sell), MM's (or specialists on NYSE) determine the configuration and how it all plays with their own agendas or how much they want to trick traders. they can slam it at once or fake and drift. Their only real objective is to make money.
If you mean the shorts now on the sidelines will be back in '09, I agree. But I disagree we will retest these lows. There will be too much stimulus coming in next year for a prolonged takedown (like we just had) and if the CDS counterparty risk gets worked out (and today was a step in the right direction). Shorts won't have the upperhand as banks begin lending again and recovery becomes positive news week to week. I can see April May and Sept Oct as tricky months next year as shorts will step in to correct as indices go too far. Remember, trillions are waiting as we speak on the buy side. I did hear today that there are $500B in Hedgie redemptions that were blocked for 3 months. However, if the market can have a few good months, those redemptions could be pulled. If they still wind up hitting the tape, we will see some kind of takedown due to forced selling. Nothing you can do there.
On the Fed side, they just have to keep a close eye on the flood of money and liquidity. Pull it back slowly AS SOON as the economy starts to work on its own again. Obama would do well to keep Bernanke on at least through '09 to manage what he's started. This whole thing can be transparent if done correctly. Not dopey Greenspan, wait until it's too late style, but on top of it week in week out style. If that does not happen then I would agree with your prediction. IMHO.
Btw.. the chart says tomorrow should be an up day for SIRI. Let's see if the trend is bucked for the meeting. I heard after hours that the word on Autos money is not tomorrow but either Thursday or Friday. Could wind up being a positive confluence with the meeting. This is Mel's chance to make up for last three months with a plan that works and that the Street will like. All we care about is if the Street likes it. If they like it so will we. Mel's got to show us the money. I'll be curious to see what 3moLibor is tomorrow after todays Fed news...
The interesting thing that is shaping up, is as you say, their is a ton of cash piling up on the sidelines. The Fed cutting rates and now evaluating whether or not to by US Treasuries, is the Fed trying to remove all of the safe havens from those seeking safety rather than risk / reward investments. With R.E. not being a great investment unless you have a very long time horizon, CD's not yielding much positive, and now the Fed "Thinking" of competing in the market for zero sum Treasury yields, their will be a push for those with the cash to get back into equities for the returns they seek. This will move the markets up and down as cautious investors take profits quicker, fearing disaster around every corner, until better numbers in the second half of 2009 and no new disasters build confidence in the longer term. IMHO.
Also I would not expect too much from Mel at the shareholder meeting in terms of structured refinancing announcements. He will be all about getting authorization for the dilution and the RS, and making sure that he has his B of D in place. I would look for next week for any news or maybe even early January before announcing anything too dramatic. If he wants the SP to move he will might piggy back on the Auto news.
On Dec 16 09:28 PM sl62 wrote:
> bdp...
>
> I think there is way more here than meets the eye and will prove
> favorable somehow for shareholders who remain diligent. 0? You don't
> really believe this stock is going to 0 do you? If you do, that's
> fine but I don't. Most who do are generalizing only by what's in
> front of their face. They don't follow the stock every day like some
> of us. For example the stand at .14 today, mid-day. And witness 24/7
> Doug A-hole McIntyre...who confidently states in his recent smear
> that SIRI "has traded below .10". While this was true for one stray
> trade spike last week of .08, by no means is that indicitive of a
> legit bid/ask trading range. And (other than the first :30 of trading
> on 12/12 where they opened At .13.9 and recorded one other trade
> @ .134 coming out of a premarket mini-takedown) not only have they
> yet to bid/ask below .14 intraday, but have never closed below .14
> either. So Doug's an ass and because he's determined to prove he's
> right for the past year claiming SIRI would BK, he's compelled to
> look as far as his nose and say, hey look, it quacked, it's a duck".
> Duh. This is common with many "pundits" following SIRI. They all
> say the same boring mantra. Blah, blah, SIRI has 1.1B in debt due
> in 2009...good gosh, how will they get past THAT hurdle? Lions, tigers
> and bears, oh my. Or weakness in autos will hurt their subs...you
> know the same boring sh%t over and over again.
>
> Listen, I know a few things and one of them is: when enough people
> all wind up saying the same negative general thing over and over
> again ad nauseum, with nothing new ever to cite, you know it's not
> as bad as it looks and often there's a lack of intelligence at the
> root of it. SIRI is not Circuit City, not Charter, not AIG, not Fannie
> Mae, not the Tribune, not any of these. As you say, they are not
> a company that issues misleading press releases either (which shows
> they are not desperate). If anything, I think it means there is more
> going on than meets the eye. This company is approaching it's day
> of reckoning. We shall finally see what all of this has been about.
> I think more and more it has not all been in vain for those who remain.
I think you're dead on. This move by the Fed was to shock and awe confidence back into equities--and I think it will work. It most certainly keeps the shorts en masse at bay for an extended period. If it's true that we are more than half way through this recession, Jan - March should prove to be a decent time for equities. I can envsion Dow 11K as money flows back in. Then as a range I see 11K - 9700.
What will help the lending problem is the EOY manadatory bank balance sheetr reveals. The fear of exposure to toxic assets still dogs interbank lending, which in turn dogs consumer lendng. Also, if he CDS clearing house gets put in place, that will help tremendously. Overall, I see many more 'potential' positives for '09 than negatives. What we've just experienced in the last 3 months seems to only have 3 major comparisons in history (Great Depression, 1974 and 1982). I guess '01 could be assumed as well but the drop was not as precipitous percentage-wise. IMO, the odds of us seeing another period like this in '09 are very slim to none (short of some major f'up as we say).
Ah yes Mel and the meeting. Listen, you may be right but I'll say this. I'm not expecting any implementation tomorrow naturally but I don't see how he avoids not disclosing something concrete regardng financing. This is the annual meeting. Their silence has been deafening otherwise. OK, fine..if that's your strategy to be silent along the way, then so be it. BUT, after all this time, if they do not by now have a strategy in place to address debt issues, it will be lamer than lame. No one here or anywhere will convince me that Mel just needs more time or he's just doing his thing. Right now, there is a pressing issue regarding the company that has caused a collapse in this company's stock price and it's the annual meeting. He better get up there with a plan in place and tell hs constituents what it is and what they've been working on all this time. The days of playing it close to the vest and secretive are over. We as shareholders deserve answers NOW. Not in January or in some new Prospectus filing slipped under the door at the close of some trading day. He needs to stand up there at the podium and tell people WTF is going on ands what their plan is. As said, no one expects implementation until Jan or of course by Feb 15, which is the deadline for the 210M, but the plan needs to be in place now and disclosed. IMVHO...
no worries. I'm in the media biz so I get your overall point...your post was just confusing at the end there...it was unclear that was meant to be a headline...
Exactly. A-holes like 24/7 Doug make their living manipulating data in generalities to attempt to bolster their cred and justify their existences as critcal reporters. He's a class AAA+ douche bag.
As I said in my last post, I've been readng all of you but kept my mouth shut.
However, seeing that tomorrow is the "big day" I had to say hi and raise a glass.
Good luck to all of us & may someone somewhere have pitty on us.......................
I thought I made a good last buy yesterday at .14 but of course it managed to break to .13 today........I'm now averaged at .72.....
I have to say, I'm not feeling too good about tomorrow. I have a bad feeling that the only things we will know by the EOD are that the dilution and split have passed and that the mgmt is still in place. Which we already know.
I hope this isn't just another "big day" that comes and goes with nothing substantial coming out of it,,,,,,,,,but I'm not feeling very good.
Quick question while I'm here,
Is it true that if the sp goes to 0 that the shorts don't have to cover? And, that they don't even have to pay taxes because there was no ending transaction.
Good luck to us all......................
Thanks
Today - 50 million share volume ....... very little changes in price all day
Well, I've got my last round in the chamber. I'm considering putting in an order at .08 which would get me down to the low 50's,,,,,,,I think I'm going to wait to see what happens tomorrow.
Funny how that info comes out at the 11th hour.....................
I hope it is true. But, I don;t see how as MEl wants a Yes and the non vote usualy goes to company desire.
FREE BANK MONEY! FED 0% makes the effective bank rate 0.18% official. The morguage lending rate will soon be 4.5%. I am absolutly sure Mel could get cheap, very cheap financing now...
If Mel does not fund this debt now it means he never had any plan to finance and stock holders were always the patsy.
No Financing yet Mel? You mean the quick and dirty thing was a cover for your plan to rape stock holders and short your own company?
Curent conditions and intrest rates are telling the true story. Mel did not count on historic low bank rates...
SL62
Your comment, "when enough people all wind up saying the same negative general thing over and over again ad nauseum, with nothing new ever to cite, you know it's not as bad as it looks and often there's a lack of intelligence at the root of it." really hits the nail on the head for me personally.
"Me thinks thou dost protest too much" is the Shakespearean line that comes to mind. One would have to wonder if there is ever going to be any positive news on Sirius post merger when reading all the negative hype from the various sources. Nevertheless, I think that it is not as bad as it is being made out to be.
Keeping the faith!
Long Sirius
Sirius is an FCC protected monopoly of SATRAD band space. In one form or another Sirius can not fail. It could go into an operational BK or be stolen private on the cheap. But someone will make millions.
This meeting and Mels action in the next 10 days with bank financing this low, will tell the true story.
Was it the plan to rape stock holders with shorts and double down dilution? We may never hear the answer but it will be obviose.
Now the econimy realy sucks Mel. It is telling on you... LOL
So, what you going to do Mel? Our Lawyers are getting restless....
That is not loving your feeling, it is pressure.
Your plan has come to an end and you better get financed.
How much money do you need from shorting? They already built a new vault just for you in the Bank of Belize.
Mel, what you going to do?
“Mel turned down a very low rate, multi year, multi million dollar loan from an investment group”?
Who would pay more for that kind of information?
What are you going to do Mel? LOL…
If Mel intention is good and rate are all time lows and above is approved then he should be able to negotiate with one top button of his shirt opened. No need to really go for RS or Dilution.
If bad intentions, then immediate plan for RS and Dilution.
The intentions should be clear within next one or two weeks.
Hope Mel has good intentions and everyone has really Merry Christmas.
I had to be out for the close today and I see that SIRI dumped out in the last 10 minutes to close @ .13. Well, if the data holds up, we should be seeing .08/.07 next. Sorry to say but maybe not so much because my hope is that then turns into the ultimate capitulation (and I will be piling in). Forget about going to 0. To go to zero, a stock needs to go sub penney .0001. Not happening in this case. Look, .13 IS zero by any standards my friends (to quote old McCain).
This means for sure that the dilution is on starting tomorrow and the stock will bottom somewhere around .05.
I have to say that I am stunned that they are holding this meeting tomorrow with a .13 SP. Worst case scenario. Wow. Good luck Mel. I actually hope he gets his ass squewered. He needs to feel some of this too ya know. What a joke.
For those unhappy with recent content changes, witness:
>>Disco and Old School Hip-Hop Channels Back by Popular Demand on SIRIUS XM Radio
2008-12-16 16:42 ET - News Release
The Strobe and Backspin return on January 15
The Beat Morning Show launches on BPM
NEW YORK, Dec. 16 /PRNewswire-FirstCall/ --SIRIUS XM Radio today announced the return of two music channels: The Strobe and Backspin. SIRIUS XM listeners will be able to listen to The Strobe and Backspin beginning Thursday, January 15.
(Logo: www.newscom.com/cgi-bi... )
The Strobe and Backspin will bring back disco/classic dance and old school hip-hop respectively to SIRIUS and XM. Additionally, The Beat Morning Show will launch on BPM on January 15. The daily show will feature popular dance hits and be hosted by former Beat program director Geronimo.
"Bringing back The Strobe and Backspin, and adding The Beat Morning Show, is part of our commitment to respond to our subscribers' overwhelming passion for our service," said Scott Greenstein, President and Chief Content Officer, SIRIUS XM Radio. "We are fortunate to have an enthusiastic audience that embraces satellite radio with unprecedented fervor. We will continue to listen to them as we strive to create the best audio entertainment experience available."<<
I don't think it was ever discussed on the other board that a company like SIRI, who is sly like a fox, will cancel on purpose to be able to bring back and make themselves look like they are caring for the consumer. Just as seen in this article--(but to which the contrary was confirmed by Mel when he opened his big mouth again last week). Now, I don't take away from them that there will be some natural and genuine give and take regarding programming (and effective listener protestation), but this one, so soon (and just before meeting time), wreaks of being contrived. IMHO.
from Today's Meeting
investor.sirius.com/se...