Sirius' Future Looks More Promising Than Ever

I have been avoiding the task of writing anything regarding Sirius XM (SIRI) of late. The truth is the last several articles I wrote were met with a slew of negative responses and personal attacks. My position was and remains for the recently approved reverse split as well as a share offering to precede what I perceive as the inevitable reverse split.

Now that Sirius XM shareholders have approved the board's recommendations, and filings have been made with the SEC, I thought I might persuade a few of my critics to see things as I do.

For starters, SIRI is a 12 cent stock. I agree that it should not be. But the simple truth remains…12 CENTS! In my opinion, the reason that it is a 12 cent stock is that far too many shares are outstanding and that makes manipulation all too easy. Most people look at the management's convert offering following the merger as the culprit, which I attribute to Jim Cramer and his “bond bully” scenario.

Although I believe he was partially correct, the new outstanding share balance following the merger of Sirius and XM is more likely the culprit. With a ton of debt, it was far too easy to bet against Satellite Radio’s future, whether shares were available to short or not. Just look at how quickly the stock went down following the merger and the creation of a monopoly. Most would agree that it made little sense.

As for the thought of bankruptcy that these shorts have bet the farm on, it will not happen. Sirius XM listeners tend to be SIRI investors. Bankruptcy would all but put Sirius XM out of business permanently. If you thought the cries that followed the channel consolidation were loud, imagine the bang that would follow a bankruptcy announcement. In my opinion, it is not even a remote possibility.

Investors have been screaming for management to take action against not only the suppressed stock price but the manipulators as well. With the company’s new plan seemingly written in stone, it appears to me that Sirius XM management is doing just that. By raising the price it achieves 2 goals, one of which is to avoid any future delisting possibilities, and the other to allow institutions that cannot buy Sirius XM for their portfolios to do just that.

The inevitable reverse split reduces the outstanding number of shares, which means not only less shares available to short but also less shares available to purchase, resulting in a rising stock price.

The pain of this has already been realized, and it's time to begin looking ahead to the future of SIRI, which may have never, since its creation, looked better from an investment standpoint.

Position: Long Sirius XM

Comments

[WTHarvey:]

Every time the TED spread drops SIRI looks better: The TED spread is the difference between the interest rates on interbank loans and short-term U.S. government debt. The TED spread is an indicator of perceived credit risk in the general economy. During 2007, the subprime mortgage crisis ballooned the TED spread to a region of 150-200 bps. On September 17, 2008, the record set after the Black Monday crash of 1987 was broken as the TED spread exceeded 300 bps. Some higher readings for the spread were due to inability to obtain accurate LIBOR rates in the absence of a liquid unsecured lending market. On October 10, 2008, the TED spread reached another new high of 465 basis points.

From the following Bloomberg chart, you can see that the TED spread is hitting new lows every day. Ergo, the perceived risk of SIRI's debt is actually ONE THIRD what it was when the stock was 10 TIMES higher. And SIRI's subscriber base just keeps growing.

www.bloomberg.com/apps...

Who was it that said, 'The times they are a'changin'?

Jan 02 05:14 AM

[cos1000:]

It seems to me that a discussion of a RS in absence of any discussion of the Company’s fundamentals is futile. While it is true that the dilution of shares at the merger and lending 263M shares for the purpose of Shorting the stock, are contributors to the current 12 cent SP, it is also true that the $1.1B (now around $.98B) of debt coming due in 2009 and negative FCF are also in the list of culprits. A Discussion of BK, brought on by all the debt restructuring uncertainty, in tough financial markets, is also not adding positive drivers to the discussion and reality of the Company’s present Stock Price.

The bottom line on whether a RS split will help at any ratio is going to be mainly dependent on the conditions of the company’s fundamentals. Resolve the debt issues for 2009 and what happens to the stock’s price? Improve 1st and 2nd quarter Auto performance / sales and sat rad penetration, and what happens to the company’s stock price?

If dilution of the Common Shares were a cause for the company’s stock price not rebounding, then all a company would need to do is simply remove dilution with a RS and watch their stock’s price soar. This is rarely the case. Manipulation of the stock’s price is possible because of all the negative perceptions and realities in the current sat rad environment. Manipulation made easier or more difficult because of the number of shares does is more an outcome than a cause. The Fundamentals allow the price to be kept down and the manipulation to continue, at any amount of shares in the Float.

My point is that whether we want to hear it or not, uncertainty about debt restructuring and all of its possible manifestations that can hurt the common shareholder (convertible debt, high interest rates, further dilution, or inability to refinance) are a main cause for the stock’s price being what it is. Some stocks are priced for perfection, but Sirius is priced for disaster.

The dilution of the stock can be dealt with at any time after the second quarter or even third. The ratio for the split and its eventual success will be dependent on the successful (beneficial to share holders) debt restructuring, improved retail OEM penetration, beating subscriber and revenue growth projections, and so on. These are the Fundamentals required for them to run a successful business model. IMHO, without changing the Fundamentals the RS will just be another way for those betting against the company’s success to profit again.

Jan 02 07:08 AM

[cos1000:]

Brandon wrote:

The inevitable reverse split reduces the outstanding number of shares, which means not only less shares available to short but also less shares available to purchase, resulting in a rising stock price.

Brandon, no name calling here, but this is simply not the case. Less shares to purchase does not translate into a rising stock price if the Fundamentals of the company haven't changed.

Jan 02 07:37 AM

[Edster:]

Look for continued positive news from Sirius/XM management in 2009. Reverse split at this time in my opinion is not the answer and I believe patience will be rewarded with a surprising stock price increase back to over a $1.00 a share. Happy New Year to all.

Jan 02 08:06 AM

[haustin1:]

I would describe myself as an investing novice. The way I see it and correct me if I'm wrong, is that there is one satellite radio provider. This is a unique and wanted product/service by the consumer. Automobile subscriptions make up the bulk of Sirius XM revenue. While car sales are down due to the economic crisis, every car manufacturer will offer Sirius XM as an option in their vehicles. In many cases, they will offer it at no charge to the consumer with a 1 year subscription as an additional incentive to purchase their vehicle. The manufacturer's pay Sirius XM for the service. Eventually, automobile sales will recover and that would be a huge positive for Sirius.
While the total amount of debt is troubling along with the portion of this debt due in 2009, I don't believe it is beyond reason that Sirius XM will be able to restructure some/all of its debt obligations.
As a listener for 3 years, I cannot tolerate terrestrial radio any longer. Commercial interruptions, loss of signal and DJ's that talk between songs without anything to say all add to my dislike of traditional radio.
So my feeling is that Sirius XM will survive 2009 either on its own by restructuring its debt, continued subscription growth and the reverse stock split OR the company will be purchased by a larger company that sees the value in the long run. Either way, Sirius XM continues to exist and from this point forward looks to me as an inexpensive long term play with a bright future.

Jan 02 08:27 AM

[relmor:]

Cos1000, I think his point is that the RS and dilution will remove the debt...
Once they stop lossing money, there should be no reason to short the stock, other than a reason to short any stock on the market right now might make you money...
If shorters feel they cant "control" Sirius SP anymore, they will move on...
But of course you are right as well, if they remove debt, keep losing money, and need more new debt, then the shorters will be right back in business..

Jan 02 08:31 AM

[relmor:]

If they intened to R/S, and dilute AGAIN, then they will lose investor confidence for a long long time....I doubt even that a new one would pass...
Sirius would be running there company like Zimbabwe basically...

Jan 02 08:32 AM

[beanboy62:]

Brandon wrote In regard to vthe R/S
The pain of this has already been realized, and it's time to begin looking ahead to the future of SIRI, which may have never, since its creation, looked better from an investment standpoint.

I could not dissagree more :
The R/s pain will only begin if and when the R/S happens. Siri common PPS has the ability and potential to rise to $1.00 or more by oct 2009. If Sirixm R/S happens It will reduce a siri holders position by 98%. With that kind of loss in leverage the remaining 2% would have to rise to astronomical levels that are virtuallt impossible in this generation . If your average pps is $1.00 to $4.00.. After the R/s Your remaining 2% will get shorted again. The effect of a R/s will be just like BK for the holders of the common. he value of the a pre R/S siri position will be whiped out. Even if you are in with a average of .12cents you will lose money for a couple years even if Siri does ok post R?S

As for the R/S getting rid of short sellers

After the R/S Siri will have 360 million outstanding and that is more than enough to keep the short sellers in this stock . before delisting.Mel karmizan said on more than one occasion that the only reason to R/S would be to avoid delisting. The Key here is to get the refinacing done and get back those shares that were lent out to short.. Siri should do a debt for equity swap with those shares . The Sec extended the delist and weshould take full advantager of that. This is just my opinion.

Jan 02 08:55 AM

[ktwalrus:]

The stock is 12 cents! And, you say bankruptcy is not even a remote possibility?

I hope you are making a lot of money off these crazy articles to compensate for all the sleepless nights you probably experience when you realize how wrong you have been and continue to be. You are as bad as a Madoff in causing a lot of financial pain to those that were roped in by your constant pumping of this loser.

Jan 02 09:26 AM

[jake621212:]

Sure Brandon....RS is great! lol Tell that to the thousands who have been holding and will lose thousands of shares and will never be able to come close to breaking even!!!

Jan 02 09:30 AM

[mgv11:]

I have to agree, fundamentals are the issue at this point. With the stock down to 12 cents, its hard for the shorts to hammer it much more. Do a RS without improving the fundamentals and we'll probably end up at 12 cents all again. We've taken the pain, why set ourselves up for a second round. Focus on the fundamentals and RS after the momenteum has changed direction. That said, fixing one of the fundamentals .... the debt, may require the RS, but I hope not.

Jan 02 09:32 AM

[Davis Freeberg:]

Considering the drivel that you write, it's no surprise that you get attacked. In the last 2 years you've been churning out article after article clinging desperately to some kind of pipe dream and yet you've consistently been wrong. How much money have people lost by listening to your advice so far? The mere fact that you view this as at "12 cent stock" instead of taking a cold hard look at the real underlying enterprise value, only demonstrates how little you really know about investing. You complain often about manipulation, but the only one I see manipulating anything is Sirius Buzz who day after day continues to publish misleading articles like this one.

The reason why the stock fell so much post merger has nothing to do with some Sith lord controlling the price of the stock. The blame falls on Karmazin who recognized that the stock was wildly over valued, so he proposed an all stock deal for XM. By doing so, he was able to sucker in arbitrage buyers pre-merger who maintained the inflated stock price for far too long. Once the merger was complete, they exited the market, the false value was destroyed and now we see a true reflection of Sirius/XM's intrinsic worth. To act like "short sellers" are the ones to blame suggests that you are incredible naive about investing or a liar.

Instead of trying to defend a broken business model with a broken balance sheet, why don't you address the VALUATION of Siri/XM. When SIRI dropped below a buck you made a big deal about how it was being unfairly punished and at these "penny stock" levels it was a great buy, but you continue to ignore the billions in debt outstanding and the fact that even at a measly 12 cents a share, it's still trading at a market cap of over $400 million. You're entitled to your opinion of course, but when I look at consumers being more careful with their money, an auto industry in disarray and debt coming due that SIRI has no credible way to pay for, I can't help but disagree about their prospect for bankruptcy. You may or may not actually believe that the listeners will step in and save the company, but I'd argue that it's going to take more then an NPR pledge drive to actually get these guys back on solid footing. At least once they do go bankrupt, I won't have to continue to read about how awesome you think they are every day.

Jan 02 09:38 AM

[SJD:]

Do not risk money based upon articles like this. Pure blather. I am an XM subscriber but would not consider the shares at this point.

Jan 02 10:18 AM

[sleiii:]

"Sirius' Future Looks More Promising Than Ever"

If you believe this is the most promising Sirius' future has ever looked, then a) you've never 'seriously' followed the stock; or b) you don't know anything about business or stock markets; or c) you're simply a cheerleader for the stock--whether planted or desperate.

From your comments, I'd say there's a good chance at least 2 out of 3 are the case.

Jan 02 10:49 AM

[mlongj:]

With each passing day, clarity becomes closer for shareholders. I would suggest that the next 44 days will be much more productive than any time since the merger. What will it be, bankrutpcy or debt paid? Only time will tell. As for the article, I would have to agree that the prospects do seem to be imporving for this company, and the actions taken so far will prevent bankruptcy in 2009.

Long Sirius

Jan 02 10:54 AM

[shure46:]

Brandon said ---- " The inevitable reverse split reduces the outstanding number of shares, which means not only less shares available to short but also less shares available to purchase, resulting in a rising stock price. "


Brandon , if you were a chemist , you would have just blown up the room , because that formula is totally whacked !!!!!!

Jan 02 11:11 AM

[sl62:]

Sorry Brandon, while I agree with your basic premise, I can't agree with how you are getting there in every case.

What I will agree with you on is shorts bet the farm on BK and thus the .12 (and as low as .111 as they took it (the .08 recorded .52wk low was a one trade spike). But the point is, they bet the farm on either "actual" BK or "the concept" of BK, and for which they will be rewarded once they decide to reconcile their positions (and some that have been already). Either way, it was a successful 1.65 to .11 takedown...so I guess bully for them.

Now we sit here at the bottom, awaiting imminent reconciliation from both the company and SP. This company and stock price will ALWAYS be not what the company "IS" but what the company "CAN" or "WILL" be someday. Back in 2003, when the SP hit .38, it would have been (and probably was) called a broken penney stock (as how most detractors seem to love to refer to it) but then was no different than now in how the Street will respond if they believe once again in "the future." With stocks like this even a short-term future works for the Street because if nothing else, it gives traders and short-term investors a great vehicle in which to make some money. Back in 2003 it was Howard and then Mel coming aboard. Now, even in the face of the LT debt picture, as details begin coming out about partner contract re-negotiations, debt restructuring, possible new significant investor stakes via Preferred being taken in the company, positive Q releases, and who knows what else (of which the possibilities are enumerable), you will once again see what happens when the Street wants another (then more stable) piece of this company. Don't forget, the company has no debt due in 2010 and Howard's contract is not up until the END of 2010 (which is a full two years out still--so whether he's going to retire or not, means little at this stage). Two years from now is way too far off to know what anything will look like. Everyone knows that "Buy and Hold" (for more than 1 or 2 years) in the general market has ended. Investors and traders alike are now focused on looking for plays that will give them a decent return within 6 months to 1 year or 18 months. As SIRI begins to "manage" (or maybe "disarm" is a better word) the current toxicity it carries, it will be looking pretty damn good over the next 12-18 months. It is for these reasons I believe that the company will begin to see an SP rally in '09 (without a reverse). If later this year, they decide to reverse, it will be more of a positive because they won't be doing it in dire straits (and probably would be a good move overall). They know that and aren't stupid, so don't look for any reverse prior to, I would say June. Reverses aren't always a bad thing. When done in desperation, they will attract flies because they stink. When done in times of upturn, they are looked at as positives and can foster better sentiment. But it should not be assumed that just because a company winds up with "less shares out" they cannot still be shorted back to from whence they came (and then worse because of the split factor).

Will SIRI's LT problems disappear in the next 3-6 months? Hell no. They will still have some viability issues no matter what, looking out to 2014. But the market doesn't look at 2014 in 2009. It looks at 2009 and some of 2010. And given the moves the company can and will make (without a BK), the market I believe will applaud these moves and view them as a great short-term story. Frankly, that's all some of us into this company are focused on also. From here on out, given the company's now 10 year SP history in relation to where it is today, that's probably all any investors at any given time will be looking at from this company. Not many will be willing to throwing SIRI shares in a drawer for the next 10 years, or even 5 years for that matter. Regardless, that would just not be sound for anyone (smart OR dumb) IMHO...

Jan 02 11:50 AM

[Edster:]

Edster agrees with hausten's comment. He is optomistic regarding satelite TV and thinks the New Year 2009 will be a pleasant surprise to those holding shares in the company. At age 78 I may still see the day when things prove favorable for SIRIUS/XM. My recommendation to those who have held on to shares through the crises continue to hold on. Look to Mel and his management team to make the company profitable beginning in the near foreseable future.

Jan 02 11:52 AM

[sl62:]

A short "tales from the front" story...

I attended the Chicago Winter Classic hockey game at Wrigley Field yesterday (froze my arse off!, but still wore my #18 Denis Savard whites proudly). Some of you maybe heard about the game of two "original six teams" outdoors for the first time at a baseball stadium (last year was the first such game on NYD at Buffalo Bills football stadium). But the point to my story is the XM logo was PLASTERED everywhere at the event. It was in the ice itself, on banners all around the stadium, on trucks outside. It was pretty much everywhere. So a great day for the brand to a national audience on NBC sports (and about 40,000 homers and visitors frm MIchigan). I was curious that they wouldn't have the new SiriusXM logo for the event but that could have been either from contract strictness or that all the printing was already done for this by August. Or maybe they just didn't care and felt that just the XM logo was enough? Hard to say. But for the sake of the now combined company, the XM brand did very well yesterday.

One last little diddy...I sat in the left field bleachers and right below me in my sightline all game just happened to be one of the huge perimeter XM logos. As a shareholder, I wasn't sure if it was taunting me or providing me with a symbol of strength lol...I preferred to see it as the latter (as I continue to believe we are very close to a justifiable correction). But it was kind of a weird occurance to have the logo right under me. I thought to myself, "Jeez, I just can't escape this company!" Anyway...

Jan 02 12:09 PM

[chicagogary:]

I am a season ticket holder and shareholder of siri. I felt the same way you did in seeing the logo every where

Jan 02 12:12 PM

[chicagogary:]

I am a season ticket holder of THE CHICAGO BLACKHAWKS and shareholder of siri. I felt the same way you did in seeing the logo every where.

I live in the suburbs of Chicago

Jan 02 12:13 PM

[chicagogary:]

sl62

I enjoy reading your posts. They appear to be right on!

Jan 02 12:14 PM

[sl62:]

Chicagogary...

Let's go Hawks! Pretty cool game huh? (except that we blew a 3-1 lead and lost 6-4!). I was a Second Balcony Bum from the old Barn days and though wasn't a season's myself, my buddy was (of two tickets) so I usually had a ticket for most games (3rd row center ice). Ah, those were the days. But now there is a new surge with this team which is very cool...but they still might be one great player away from going all the way (like maybe a netminder!). De-Troit looks pretty scary. Hey, as much as ya hate to say it, they're Hockey Town and rarely ice a bad team...

I dug the throwback uni's on both sides yesterday...

Jan 02 12:34 PM

[relmor:]

sl62 and Cos1000 are more qualified to write these articles...You get much better information from them..
I am here to destroy those who tell lies..Regarless of my stock position, I just dont like them...
When Sirius bashers come on here, I will bash them...I am mean, and I bite harder than a little dog...
I am calling the bottom at .12 cents(ive had many bottom calls however, hehehe...)third time might be the charm(1 was way off, and .32 cent bottom call was way off...)

Jan 02 12:37 PM

[chicagogary:]

I had season tix (3rd row sec balcony) back in the day. I now have 4 tix 1st row in the 300 level. They are awesome. If you are ever looking to purchase a couple ( face value of course), let me know.

I would enjoy talking to a Blackhawk fan and a knowledgeable Siri shareholder.

Jan 02 12:40 PM

[chicagogary:]

sl62


I had season tix (3rd row sec balcony) back in the day. I now have 4 tix 1st row in the 300 level. They are awesome. If you are ever looking to purchase a couple ( face value of course), let me know.

I would enjoy talking to a Blackhawk fan and a knowledgeable Siri shareholder. Reply |Report abuse| Link to Comment 00

Jan 02 12:41 PM

[sl62:]

chicagogary...

Thanks...

Jan 02 12:51 PM

[dayworker:]

If management would go public with their plans to refi then some confidence
would be restored the debt will be taken care of and ps will rise.
The failure to give the market some some solid evidence of the plan to
pay off debt is a contributing factor of the low ps.
Why won't they give us the specifics. Also, why don't they consider junk
bond issues. Their are players in the market looking for junk bond returns.
With SIRI's good revenue stream and potential subs growth a junk bond could be a good investment. It would pay off debt and show a better balance sheet.
As far as RS split, who does it help. It may help the bosses and the talent
but the early common shares get whacked. So basically it's for future
stock players, management and talent. It's robbing Peter to pay Paul.
It's like sacrificing the army to save the generals and the new arriving
troops.
The situation SIRI is in reflects a short sighted management as far as budget planning, overspending and using the potential of a one industry
Sat Rad incompetently as a business model. The management really
comes up short as far as tapping the younger generations for a must have
techy like the ipod or a navigator. They don't get it as far as making it
something everyone wants to have. Where are the big concerts everyone
wants to hear. The new young talent everyone wants to hear. Their still
using SIRI for a lot old timers like themselves.

Jan 02 12:56 PM

[cos1000:]

relmor

Down Boy...... but thanks for your comments and your keeping the Board Safe from those damn Bashers and truth benders....

I am off to visit with my Daughter, Son In Law and Grand Kids, the newest being just a couple of weeks old....... and the other 3+ years. Its a couple days drive, but am looking forward to getting away and thank god I've got a Sirius Radio for the ride...... I always enjoy traveling After the Holidays...

Jan 02 01:04 PM

[cos1000:]

Careful dayworker, I resemble that remark...... LOL

.........<Their still using SIRI for a lot old timers like themselves.

I couldn't agree more that they need to be innovative in their support for new talent, concerts (especially with subscriber discounted seats), and the like.... Bringing forth a new portable unit that is Wi Fi compatable and allows immediate purchasing of downloads are all in the future here now that this merger bs is done. 2009 could be a very interesting year once the debt is resolved. Lets hope current shareholders are taken along for the ride.........

Jan 02 01:11 PM

[sl62:]

relmor...

You are the original and respected enforcer here...

We called 3 legit potential bottoms. One @ .68, which did hold/bounce and scream back to 1.09 in premarket in mid-Sept.. But of course that was either the day (or close to it) when Lehman died. How were we supposed to think THAT was going to happen? Without all that bs, .68 would still be the bottom IMO. Then came all the fall out from that (CDS's etc...), and we broke through .68 quickly and slid down to .42 by Halloween (and when came the imfamous Proxy release). After a hold, in the .30's it looked like that was the bottom at around .30. From that, there was the Nov retest and the company had no bullets to fire to keep it from getting here. As I have said before, because of the credit and market crash, we'll never know if .12 / .11 would have even been possible otherwise. But I agree that with anticipated plan in the works, I think many (besides people who can't look past their nose) are starting to believe there is a viable short-term solution in the offing...which should hold this bottom firm. The action of the last two weeks tends to confirm this as a high probability. Sooner than later, as news spills out, the short plays are going to concede with new traders piling in. Just a matter of time...

Jan 02 01:16 PM

[sl62:]

Have a good trip cos1000...

Jan 02 01:17 PM

[Honey:]

Mybroker extolled the ivrtues of Sirius several years ago when th stock was over $6.00. I should have fired him .

Jan 02 01:20 PM

[relmor:]

Any other year this stock stays above 1....IMO...But that merger financing would have killed any stock price...

Jan 02 01:48 PM

[mogami_99:]

Hi, Yeah that 5 bil in "GOODWILL" killed us.

Jan 02 01:51 PM

[nakedjaybird:]

Honey is the only one saying anything here today that is right on.

Jan 02 01:51 PM

[mogami_99:]

Hi, I don't have a broker to blame. I bought Sirius all on my own. First I recognized the name, Second the stock price was low and target was 3x then current price. Third when price kept falling I kept thinking "it can not go any lower better buy more before it goes up. " So I am where I am at totally on my own.


On Jan 02 01:20 PM Honey wrote:

> Mybroker extolled the ivrtues of Sirius several years ago when th
> stock was over $6.00. I should have fired him .

Jan 02 02:00 PM

[mogami_99:]

Hi, CNBC quote "Sammy Sosa homerun record will have astrix." (I think he means Barry Bonds) Be nice is Dog could get over .13 and hold. Would make start of next week stronger for us.

Jan 02 02:06 PM

[asm610:]

I'd like to see some news about partnering up with a NON Automotive entity here in the short term. That is the avenue they need to look down now. Of course they will always be tied into cars.....but it's time to really explore the possibilities as well. Let's see them do something with RIM and the Blackberry....or something along those lines! I think that is a possibility, or an opportunity for both companies that would work and help both, by giving Blackberry something to put up against the IPhone and give SIRIXM soething other than Cars and their own unique sattelite devices to play and expand to.

Jan 02 02:13 PM

[sl62:]

If you guys look at what SIRI has in a service, spectrum, et al...just look at how many potentials they have to grow into. Obviously Mel wanted that spectrum the most. I am not doubting that there couldn't be some new deals to use that spectrum on the horizon. It's like owning land...and it's what could really get this SP moving again...well beyond just getting off the floor here...which is a given.

Jan 02 02:32 PM

[sl62:]

Look at this. Suddenly we just hit 9000. S & P 927. 918 was said to be the mark to clear today for getting higher from here. This is what people say and some of us know. The market tends to move insidiously quick. You have a few days of seeming nothing and the next thing you know, you break through either up or down. Last week we were hovering @ 8450 and today we're over 9000. Just like that. And this is how people say, "I don't want to miss the rally"...sometimes it's over before people realize it even happened.

Granted volume is low, but let's see what happens next week. If we close above 918, it should be bullish.

Jan 02 02:40 PM

[Come on Guy...:]

Hey do u guys know when the 4Q Results are going to be presented?

Jan 02 03:28 PM

[relmor:]

sl62, market action is forced...No heavy selling, because planned selling hasnt been scheduled for this week.
Big money is not moving money right now.
They cant afford to sit on stocks long term, they will exit on all rallies.
Trying to compound the end of year rally with a Obama rally, its not going to work.
So much bad news coming this month, it will be staggering.
They are pumping up the market so it can fall again, without setting new lows. They dont want new lows till most bad news is out.
1. Commerical real estate is going to get pounded after christmas sales are announced, and we see who was just sticking in till the holidays.
2. Unrest in the world. War, food shortages.
3. Dollar backed assets are not wanted by foreigners.
4. Yen carry trade is unwinding still, I refuse to believe it is done. They cant make the yen too strong too quickly, or the country of Toyota gets upset and threatens to raise prices on the Wii...(being sarcastic here)
5. Credit card defaults will be unprecedented.
6.Simply no money to go into the market, if small investors are strapped, then the Ponzi scheme that is the stock market cant work(solution...drop prices to "bargain" levels "again", and sucker in more dumb money. If only the FED is buying stocks, then the rally wont last.

Jan 02 04:22 PM

[relmor:]

Automakers get bailed out, the market is in a huge up rally, ford stock is way off lows, and its biggest investor bails...Yes, definately buy into this rally, by all means. I can give you a thousand other reasons why to short all rallies. Trend lines in DOW are not BROKEN. Still intake. We simply have a triple top here. No TA reason to think its a break out. You cant have a legitamite breakout with low volume.

Jan 02 04:25 PM

[relmor:]

Remember this market is rallying on absolutely no concrete data yet from holiday numbers. This rally is toast very soon...But dont risk margin on this, never, all shorts at 9000 with cash will be positive before the year is over...My guess is positive by the end of Monday, :)

Jan 02 04:41 PM

[killerkaul:]

Cos1000............... hey buddy............. you travel safe, and enjoy your much deserved holiday. We'll hold the line. .... NO FEAR. ..killer.

Jan 02 05:10 PM

[polishlogician:]

I agree, though I'd also say that within the next 6 months, I could see it going to 36 cents, which is to say it wouldn't surprise me in the least, in fact, why bottom out at 12 or 8 or any low number, 36 is as good as anything else when you're looking just towards the future, and if they get the refinancing behind them, they have the R/S looming to pull out of the bag, they will also, going forward, pry state a lot of reductions in expenses with the merger and also tightening the belts, it could easily be a 300% gain, and that's just in the short term...and this an odd question, perhaps someone out there who's in the know could answer this, but how many satellites do they have total (on ground, in orbit), and how many do they really need, isn't there anyone willing to lease a few satellites, I had thought such might be another revenue stream.

On Jan 02 11:50 AM sl62 wrote:

> Sorry Brandon, while I agree with your basic premise, I can't agree
> with how you are getting there in every case.
>
> What I will agree with you on is shorts bet the farm on BK and thus
> the .12 (and as low as .111 as they took it (the .08 recorded .52wk
> low was a one trade spike). But the point is, they bet the farm on
> either "actual" BK or "the concept" of BK, and for which they will
> be rewarded once they decide to reconcile their positions (and some
> that have been already). Either way, it was a successful 1.65 to
> .11 takedown...so I guess bully for them.
>
> Now we sit here at the bottom, awaiting imminent reconciliation from
> both the company and SP. This company and stock price will ALWAYS
> be not what the company "IS" but what the company "CAN" or "WILL"
> be someday. Back in 2003, when the SP hit .38, it would have been
> (and probably was) called a broken penney stock (as how most detractors
> seem to love to refer to it) but then was no different than now in
> how the Street will respond if they believe once again in "the future."
> With stocks like this even a short-term future works for the Street
> because if nothing else, it gives traders and short-term investors
> a great vehicle in which to make some money. Back in 2003 it was
> Howard and then Mel coming aboard. Now, even in the face of the LT
> debt picture, as details begin coming out about partner contract
> re-negotiations, debt restructuring, possible new significant investor
> stakes via Preferred being taken in the company, positive Q releases,
> and who knows what else (of which the possibilities are enumerable),
> you will once again see what happens when the Street wants another
> (then more stable) piece of this company. Don't forget, the company
> has no debt due in 2010 and Howard's contract is not up until the
> END of 2010 (which is a full two years out still--so whether he's
> going to retire or not, means little at this stage). Two years from
> now is way too far off to know what anything will look like. Everyone
> knows that "Buy and Hold" (for more than 1 or 2 years) in the general
> market has ended. Investors and traders alike are now focused on
> looking for plays that will give them a decent return within 6 months
> to 1 year or 18 months. As SIRI begins to "manage" (or maybe "disarm"
> is a better word) the current toxicity it carries, it will be looking
> pretty damn good over the next 12-18 months. It is for these reasons
> I believe that the company will begin to see an SP rally in '09 (without
> a reverse). If later this year, they decide to reverse, it will be
> more of a positive because they won't be doing it in dire straits
> (and probably would be a good move overall). They know that and aren't
> stupid, so don't look for any reverse prior to, I would say June.
> Reverses aren't always a bad thing. When done in desperation, they
> will attract flies because they stink. When done in times of upturn,
> they are looked at as positives and can foster better sentiment.
> But it should not be assumed that just because a company winds up
> with "less shares out" they cannot still be shorted back to from
> whence they came (and then worse because of the split factor).

>
>
> Will SIRI's LT problems disappear in the next 3-6 months? Hell no.
> They will still have some viability issues no matter what, looking
> out to 2014. But the market doesn't look at 2014 in 2009. It looks
> at 2009 and some of 2010. And given the moves the company can and
> will make (without a BK), the market I believe will applaud these
> moves and view them as a great short-term story. Frankly, that's
> all some of us into this company are focused on also. From here on
> out, given the company's now 10 year SP history in relation to where
> it is today, that's probably all any investors at any given time
> will be looking at from this company. Not many will be willing to
> throwing SIRI shares in a drawer for the next 10 years, or even 5
> years for that matter. Regardless, that would just not be sound for
> anyone (smart OR dumb) IMHO...

Jan 02 05:21 PM

[Sworntwofun:]

You dont have to read about sirius now.... you can go jump off your roof and do us all a favor!


On Jan 02 09:38 AM Davis Freeberg wrote:

> Considering the drivel that you write, it's no surprise that you
> get attacked. In the last 2 years you've been churning out article
> after article clinging desperately to some kind of pipe dream and
> yet you've consistently been wrong. How much money have people lost
> by listening to your advice so far? The mere fact that you view this
> as at "12 cent stock" instead of taking a cold hard look at the real
> underlying enterprise value, only demonstrates how little you really
> know about investing. You complain often about manipulation, but
> the only one I see manipulating anything is Sirius Buzz who day after
> day continues to publish misleading articles like this one.
>
> The reason why the stock fell so much post merger has nothing to
> do with some Sith lord controlling the price of the stock. The blame
> falls on Karmazin who recognized that the stock was wildly over valued,
> so he proposed an all stock deal for XM. By doing so, he was able
> to sucker in arbitrage buyers pre-merger who maintained the inflated
> stock price for far too long. Once the merger was complete, they
> exited the market, the false value was destroyed and now we see a
> true reflection of Sirius/XM's intrinsic worth. To act like "short
> sellers" are the ones to blame suggests that you are incredible naive
> about investing or a liar.
>
> Instead of trying to defend a broken business model with a broken
> balance sheet, why don't you address the VALUATION of Siri/XM. When
> SIRI dropped below a buck you made a big deal about how it was being
> unfairly punished and at these "penny stock" levels it was a great
> buy, but you continue to ignore the billions in debt outstanding
> and the fact that even at a measly 12 cents a share, it's still trading
> at a market cap of over $400 million. You're entitled to your opinion
> of course, but when I look at consumers being more careful with their
> money, an auto industry in disarray and debt coming due that SIRI
> has no credible way to pay for, I can't help but disagree about their
> prospect for bankruptcy. You may or may not actually believe that
> the listeners will step in and save the company, but I'd argue that
> it's going to take more then an NPR pledge drive to actually get
> these guys back on solid footing. At least once they do go bankrupt,
> I won't have to continue to read about how awesome you think they
> are every day.

Jan 02 08:02 PM

[yodaman:]

I have to agree with your comments related to "traditional" radio broadcasts. However I have two lifetime subscriptions to Sirius and in the two years that I have been a subscriber I have noticed an increase in chatter on the music channels, specifically "The Roadhouse". I have contacted Sirius commenting on this issue and continue to wait for a response from this company. It is my opinion that if the company wants to provide the service that is being sold while at the same time make a substatial "plus" in the bottom line then by all means get rid of the so called "on-air" personalitys that continue to pull a paycheck for chatter. I subscribed to hear music and now this service is headed in the same direction as cable TV. Once you're hooked the commercials will begin to appear. Imagine that!!!


On Jan 02 08:27 AM haustin1 wrote:

> I would describe myself as an investing novice. The way I see it
> and correct me if I'm wrong, is that there is one satellite radio
> provider. This is a unique and wanted product/service by the consumer.
> Automobile subscriptions make up the bulk of Sirius XM revenue. While
> car sales are down due to the economic crisis, every car manufacturer
> will offer Sirius XM as an option in their vehicles. In many cases,
> they will offer it at no charge to the consumer with a 1 year subscription
> as an additional incentive to purchase their vehicle. The manufacturer's
> pay Sirius XM for the service. Eventually, automobile sales will
> recover and that would be a huge positive for Sirius.
> While the total amount of debt is troubling along with the portion
> of this debt due in 2009, I don't believe it is beyond reason that
> Sirius XM will be able to restructure some/all of its debt obligations.
>
> As a listener for 3 years, I cannot tolerate terrestrial radio any
> longer. Commercial interruptions, loss of signal and DJ's that talk
> between songs without anything to say all add to my dislike of traditional
> radio.
> So my feeling is that Sirius XM will survive 2009 either on its own
> by restructuring its debt, continued subscription growth and the
> reverse stock split OR the company will be purchased by a larger
> company that sees the value in the long run. Either way, Sirius XM
> continues to exist and from this point forward looks to me as an
> inexpensive long term play with a bright future.

Jan 02 09:49 PM

[Illusional ...:]

I have not read much about Sirius, but I remember a saying "a stock is not a penny stock for no reason". The company looks sickly and frail for many reasons, not to mention the fundamentals.

Frankly, I personally don't like or do any name calling, but I can see the enormous amount of curiosity that such an uninformative article can be published on such SA. Good luck to your longs anyway. I am unlikely to buy into the media/radio sector, much less now.

Jan 03 02:04 AM

[Are You Kid...:]

Is a reverse split going to change the fact that this company loses money hand over fist? The only way to save this POC is for SIRI to start turning a profit. Without some change in the fundamentals, you're just gambling on BS short term movements.

Jan 03 03:33 AM

[Not all tha...:]

I think Mel's plan is:

- Issue stock to retire as much debt as possible

- Do an RS if absolutely needed

- Sell to a private equity firm

Think about it. Once the debt is retired, you have a company that generates huge amounts of cash monthly, and it has already gotten rid of most of the redundancies. Of course, the current stockholders get boned in the process. Mel can cover his ass by saying that this was the best course of action to keep the company operating, long-term.

Jan 03 08:37 AM

[relmor:]

Unless its the government, thats not how it works. You can issue shares to pay off debt, have no debt, then undersell your stockholders to a private equity company, too many lawsuits..Its called fraud...He would go to jail for that...Freddie and Fannie and AIG are different, governement actually had to become owners of sorts to save the company. If sirius doesnt need saving, selling for the sake of selling to scew stockholders would never be allowed. It doesnt happen like that. Selling without issuing shares, thats done all the time.

Jan 03 09:33 AM

[relmor:]

For all commenters on here that think you have to generate a profit or even have a good balance sheet for your stock price to rise havent been investing in the market very long. Ive seen some crazy market caps on companys that havent ever made a penny...or just starting out...There are hundreds of undervalued companies right now that dont make money. There stock goes up and down all the time...Media company is different, rules dont apply...Too much government interest...You know "free" information is dangerous to the public.There is massive manipulation going on here, beyond the shorting. That would explain temporary drops, not permentant ones. Not permenant yet...Still not in an area Id worry about.. I wasnt counting on this stock doing much before January.

Jan 03 09:37 AM

[relmor:]

For all commenters on here that think you have to generate a profit or even have a good balance sheet for your stock price to rise havent been investing in the market very long. Ive seen some crazy market caps on companys that havent ever made a penny...or just starting out...There are hundreds of undervalued companies right now that dont make money. There stock goes up and down all the time...Media company is different, rules dont apply...Too much government interest...You know "free" information is dangerous to the public.There is massive manipulation going on here, beyond the shorting. That would explain temporary drops, not permentant ones. Not permenant yet...Still not in an area Id worry about.. I wasnt counting on this stock doing much before January.

Jan 03 09:37 AM

[relmor:]

I meant to say above you cant issue shares, pay off debt, then turn around and sell for pennies on the dollar below what you sold those shares for. If they bleed money still after that, for quarter after quarter, then yes, they can sell.

Jan 03 09:38 AM

[leh:]

The NY Times Business section had a pretty decent longish article on Sirius and Karmazin last Sunday that is worth reading. Said Mel's biggest obstacle is the enormous $1 billion dollar debt refinancing that must be done in 2009, starting soon. Turns out this is not exactly a great environment for money shopping, especially in an enterprise as risky as this, and the few lenders that have approached Sirius are demanding exorbitant interest rates. No surprise there, but it does hang a lead weight on the company and stock price until this issue is somehow addressed.

As for Howard Stern, he only has himself to blame--though of course with Siruius's help--for the company's woes and his cache of worthless stock options. To suck a half a billion dollars off the top from a bootstrap enterprise just as it was trying to get on its feet to pay one man's salary was beyond stupid for both parties. The fact that Sirius had to tack on another $13/month charge for Stern's "premium" services was a sure sign they had badly overpaid this over-the-hill shock jock. Shame on Stern for his greed and on Sirius for enabling it at the expense of its shareholders. I'm convinced it will go down in business history as one of the worst deals of the past decade.

Jan 03 11:36 AM

[sstro:]

How long until they go to Washington for a bailout? They might get one, being all the celebs who have a show on the network contributed to the campaigns of our inept leaders. Maybe GM will give them some cash because they won't be able to sell cars without the Sirius radio. I think it's time to take your lumbs and get out rather then try and pump up your position. Besides why would I buy this stock in hopes of it going up just for some clowns who got free shares to dump them leaving me to hold the BAG.

Jan 03 11:50 AM

[jrs87sch:]

I HAVE TO SAY, as a customer, I love the new Sirius/XM. They could do a few things to increase their revenue streams, though. They could add a satellite TV station network for cars and boats with TVs.

We will have to see if the merger was successful; only time will tell.

Jan 03 03:03 PM

[canis major:]

yeah i called a bottom at 32 also but now there appears to be a very well defined base here at 12. look at it this way, we can only be wrong eleven more times eh?
then again with our luck and the way this thing trades, it may start going past zero to -1,-2,-3 ecc....ecc , so not only will we have lost all our money but we would have to start sending them some more!!!

Jan 03 03:54 PM

[E Nuff Sed:]

I think given the huge debts the current investor would get diluted to almost nothing.

Brandon, buying into debt for 12 cents on the dollar may be a better bet as it would likely get converted into equity after the re-org.

Jan 03 06:08 PM

[FoolNHisMoney:]

On Jan 03 11:36 AM leh wrote:
>
> As for Howard Stern, he only has himself to blame--though of course
> with Siruius's help--for the company's woes and his cache of worthless
> stock options. To suck a half a billion dollars off the top from
> a bootstrap enterprise just as it was trying to get on its feet to
> pay one man's salary was beyond stupid for both parties. The fact
> that Sirius had to tack on another $13/month charge for Stern's "premium"
> services was a sure sign they had badly overpaid this over-the-hill
> shock jock. Shame on Stern for his greed and on Sirius for enabling
> it at the expense of its shareholders. I'm convinced it will go down
> in business history as one of the worst deals of the past decade.

I love commenter’s like this. All they see is a big number like $500B and they are outraged that anyone would get such a sum of money. Did you do even a rough cost-benefit analysis on the deal or are you just blinded by your dislike for Howard Stern? I’m not going to waste my time posting an education for you – it’s just not worth is with a comment like “Sirius had to tack on another $13/month charge for Stern’s ”premium” services” Do you even know what a satellite subscription costs?

Jan 03 07:21 PM

[SiRi - Hope:]

Forget about how much money Siri owes. Its a wonderful service with many many directions it can go in with the next 5-10years. Can someone tell me why some of these real stable companies arent talking with siri about taking them over? Wouldn't a great company such as siri, that needs help, be a great deal for another company that wants to keep growning? I listen to siri daily and have been following the ups and downs of the company for the past three years. Can someone talk on my comments? Thanks

Jan 03 10:12 PM

[PROXIMO:]

The next time you feel compelled to discuss the glowing prospects for Sirius XM, you may want to take the needle out of your arm first.

Jan 04 12:03 AM

[mak-mak:]

i really think sirius has a lot of potential in selling pre-installation packages for new homes,i see a future past the boombox stage where my channel programming kit is nicely flushed into my walls and the wiring hidden between studs with a stylish antennae mounted on the rooftop for all my neighbours to see and inquire about.. this products potential can really become unlimited once its name brand recognition can get past the 'only used in cars" stage it is at now.i mean how many boats are equipped with sattelite radio,not many,there is another huge market in the waiting.ido believe this company has a great future and have invested for the long term..i do enjoy reading the number crunching and stock theories but much of it is over my head,,heh .

On Jan 02 12:09 PM sl62 wrote:

> A short "tales from the front" story...
>
> I attended the Chicago Winter Classic hockey game at Wrigley Field
> yesterday (froze my arse off!, but still wore my #18 Denis Savard
> whites proudly). Some of you maybe heard about the game of two "original
> six teams" outdoors for the first time at a baseball stadium (last
> year was the first such game on NYD at Buffalo Bills football stadium).
> But the point to my story is the XM logo was PLASTERED everywhere
> at the event. It was in the ice itself, on banners all around the
> stadium, on trucks outside. It was pretty much everywhere. So a great
> day for the brand to a national audience on NBC sports (and about
> 40,000 homers and visitors frm MIchigan). I was curious that they
> wouldn't have the new SiriusXM logo for the event but that could
> have been either from contract strictness or that all the printing
> was already done for this by August. Or maybe they just didn't care
> and felt that just the XM logo was enough? Hard to say. But for the
> sake of the now combined company, the XM brand did very well yesterday.
>
>
> One last little diddy...I sat in the left field bleachers and right
> below me in my sightline all game just happened to be one of the
> huge perimeter XM logos. As a shareholder, I wasn't sure if it was
> taunting me or providing me with a symbol of strength lol...I preferred
> to see it as the latter (as I continue to believe we are very close
> to a justifiable correction). But it was kind of a weird occurance
> to have the logo right under me. I thought to myself, "Jeez, I just
> can't escape this company!" Anyway...

Jan 04 01:44 AM

[learn to think:]

I've been wanting to get back into this stock to recoup losses (haven't been in since Oct.) but something kept holding me back. Now, getting in before the reverse split seems like a dangerous game (only for guys with a steel stomach). I've called bottom at 1.50 , 1.00 , .68 , .50 , and .25. If the stock was organically sinking our calls probably would have been close, but with manipulation from billionaires it has been hard to chart (I'm a third grader compared to relmor, cos and sl62). Now with the stock at .12 every penny is almost 10%. I'm calling a .12 bottom but we all know what that really means. Having said that, after the reverse split, if they don't short it back down again, I see the stock (after the debt gets taken care of) maybe going above $20 in 2010. That still wouldn't bring me even but I would still get some of my money back from these crooks. Have a good night all...

Jan 04 01:45 AM

[learn to think:]

Mak-Mak , You for some real information for investors to think about.

Jan 04 01:49 AM

[Come on Guy...:]

After the 4Q release the stock will jump up a bit, then they might start shorting again!!

Jan 04 03:08 AM

[Anthony Dad...:]

Howard stern may leave at the end of his contract. Also carmakers are having problems selling their product.(biggest customers for satellite radio). Tons of debt. I would not touch it.

I am a contributor on www.thecreatingwealthb...

Jan 04 08:03 AM

[leh:]

Yes, in fact I'm a longtime happy XM subscriber, so know exactly what the satellite subscriptions cost--and I'd be loath to pay double to listen to Stern, which is what Sirius charges. Anyone calculated their payback as far as recouping the costs to sign Stern? My guess is it would be measured in decades, if not longer. The fact remains the Stern deal was a fiasco, and Karmazin admits as much in the NYT article I referenced.
I have nothing against Stern as a performer and used to occasionally listen to him when he was still on (free) terrestrial radio. But every dog has his day and Stern's is clearly past. Organizations that overpay for over-the-hill talent routinely get punished for it--see the recent NY Jets deal for Brett Favre--and IMO this is no different, just on a grander scale.

FoolNhisMoney should get together with the guy who advises us to simply "forget what Sirius owes" and have an ostrich fest. As several others here have pointed out, there's a reason this stock is trading for pennies. Best scenario I can see is a buyout by a larger media company with deep pockets, but I doubt the common shareholder will benefit.


On Jan 03 07:21 PM FoolNHisMoney wrote:

> On Jan 03 11:36 AM leh wrote:

Jan 04 11:53 AM

[zh:]

Outstanding logic - they wont go bankrupt because subscribers would be 'mad' - that one gives me quite a laugh! Thanks...

"Bankruptcy would all but put Sirius XM out of business permanently. If you thought the cries that followed the channel consolidation were loud, imagine the bang that would follow a bankruptcy announcement. In my opinion, it is not even a remote possibility."

Jan 04 12:46 PM

[FoolNHisMoney:]

Leh,

You state again that Sirius charges double for Howard Stern, which is absolutely false: $12.95/mo or the full Sirius lineup as it has always been (look here: www.sirius.com/package...). I also read that NYT article and nowhere in it does Mel come close to saying that the Stern deal was a fiasco. Here's exactly what he says: “Would I like to have seen Howard get less money?” Mr. Karmazin asks. “Yes. But I think any company that deals with content would say the same thing.” So I ask only that you get your facts straight before posting innuendo and falsehoods.

As for your statement that it would take decades to recoup the costs to sign Stern - Howard has brought and estimated 5M subscribers to Sirius which calcs out to some $600M per YEAR in revenues at the going avg rev/sub. That doesn't include the number of XM subs that can now access the show. That for a deal of $500M over five years (which much of is tied to subscribing growth targets and is probably worth much less now as much of it was stock options that may not pan out due to market conditions). Sirius had only 600K subscribers before signing Howard in 2004 and 8+ million at the time of merger. How can you objectively think it was a bad deal?

Jan 04 03:51 PM

[polishlogician:]

Siri looked 'more promising' at $9 pps; why? Because of the hype, where's the hype gone? Some say it doesn't deserve 12 cents pps, pry not, but why not? Is there a cent of profit? I love the service (lifetime sub), and I think that if any firm can get TARP money (cars, steel, housing)--then give it to SIRI also, they will show a profit in time, they need a loan/refi at good terms now, and the FCC can be said to be part of the problem with their incredibly long and stupid merger process, so let the Feds make up for it. I just hope some of that GM money finds its way to the Siri coffers, where it can do some good.

Jan 04 04:39 PM

[Timeline St...:]

I know that Sirius has a lot of investors who follow it closely, so perhaps I am wading into a minefield with these comments.

Why should a stock that trades for 12.2 cents have a future that looks promising at all, and why would it be 'more promising than ever'?

Is this the technology that will win in the end? With the inability to upload information easily, isn't this just glorified radio? The technology seems very limited to me and there are much more powerful, mobile options like smartphones that have infinitely more function and flexibility.

Why isn't it profitable? I see red figures to the horizon. Why should an investor care about this technology that bleeds cash?

Why aren't more of the investors here, who obviously spend a lot of time analyzing this company and its offerings, looking elsewhere? There are hundreds of companies with promising and profitable futures. Why waste so much effort on this one?

This stock may have been a Wall Street darling in the 90's but so was Sun Microsystems, Netscape, Webvan, etc. I guess I just don't get it. Howard Stern was perhaps the only person to make much money off of this boondoggle.

Jan 04 07:45 PM