It’s a bit funny to see that the Sirius (SIRI) stock pumpers are still at it, despite facing nothing but absolute humiliation after making ridiculous claims and clinging onto their delusions of grandeur as the stock collapsed by over 95% after merger with XM.
In the end, the stock price says it all. Since the dotcom bubble collapsed, reality has set in. SIRI has done nothing but fall - and with good reason. The company has been very poorly run. It’s had a terrible strategy, ridiculous payouts for content and unbelievably ridiculous payouts to executives. The management has been horrendous from day one and remains so.
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I won’t waste anyone’s time (including my own) making a case for why SIRI is one of the worst managed companies I have seen in many years. Instead, I will point you to a couple of pieces I wrote on SIRI awhile back (here and here) so you can be reminded of the truth.
Remember, this is a company that has not made a single penny of profit since inception over fifteen years ago. Meanwhile, Stern and the executives have made out big at the expense of misguided shareholders. Combined, these payouts are likely to have surpassed $2 billion since inception. Maybe now you know why SIRI’s debt is so high.
I’ve never seen a stock (besides pink sheets and bulletin boards) whose shareholders consisted of so many unsophisticated investors. Perhaps this explains the widespread attempts by so many to pump the stock all over stock chat boards, forums and financial websites that many go to for credible guidance – as if individual investors make stocks move; just another example of the “insight” shared by SIRI pumpers.
Despite all of the “coming announcements soon from Mel” and all of the other desperate pumps, the stock has done nothing but go down for many years. It’s time to wake up and realize when people are spreading propaganda for their own interests. I can tell you this. I have never bought SIRI, even to short it.
As the records show, I knew the stock was headed down. In fact, I still say it will be sold for pennies or go bankrupt. I make it a rule to stay away from extreme forms of trash, even for shorting.
It always comes down to management. And that does not bode well for Sirius. The Chairman is suspect at best, due to his involvement with Global Crossing. And similar to Stern, Karmazin’s best days are way behind him. He’s just another old boy from the media who’s out of touch with modern media and business trends.
But SIRI’s management appears to understand how to screw shareholders and get media coverage on TV networks watched by sheep. Sirius management has pulled every dirty trick out of the book to make it to the next executive stock option payday.
In my opinion, the company has the many characteristics of firms that end up filing for bankruptcy. But at least many of these companies have a history of profits. Sirius has abused the Wall Street mechanism, making huge bets, paying out eye-popping compensation to executives, Stern and others. This has diluted shareholder equity in a manner similar to what I have seen done with bulletin board and pink sheet stocks. It’s really a sad situation to behold. These are the real issues that should be highlighted when the media mentions Sirius, not some speculative forecasts, which as we have seen over and over, rarely pan out.
When you spot a company that has failed to turn a profit since inception, burned through billions of dollars irresponsibly, and is absolutely dependent upon a merger for the slightest chance of survival, you had better not take what management says at face value. You need to make certain their methods, along with all assumptions make sense.
The reality is that the recent market rally, which served to help out SIRI should be taken as an opportunity to exit because the stock is headed back down. And I wouldn’t bet on the future of this dog. It’s a sucker’s bet.