Sirius XM Explores Used Car Market to Offset New Car Declines

By Brandon Matthews

The current run rate of new car sales in the U.S. is now pegged at just over 10 million units for 2009, nearly 5 million units below its historical peak. That’s not necessarily bad news for Sirius XM (SIRI). The forecast of $350 million of positive EBITDA in 2009 given by the company had already assumed this. Anything above that targeted number represents a bonus. For the most part, the used car market has been historically ignored by the company, until now.

Monday, Sirius XM announced that Mercedes Benz would begin offering Satellite Radio as part of its Certified Preowned program. With this announcement, the list of companies now offering Satellite Radio as part of their Certified Preowned programs includes:

• General Motors,
• Honda,
• Volkswagen,
• Acura,
• Volvo,
• BMW,
• Porsche
• Ford (Regional)
• Mercedes Benz

Sirius XM has also teamed up with CarMax (KMX) and AutoNation (AN). There will no doubt be some growing pains as these programs are instituted, yet there can be no doubt the annualized run rate of new cars sales will no longer be the glass ceiling holding Sirius XM back from achieving its potential. Used car sales have been much more stable than new car sales.

As more and more used cars that are Satellite Radio equipped make their way into the secondary marketplace, Sirius XM should begin to realize a mushroom effect on its U.S. penetration. Used car marketing makes sense in that the factory-installed radios in these vehicles have already been bought and paid for by Sirius XM, which leaves room for marketing while containing subscriber acquisition costs (SAC).

Considering the fact that historically Sirius XM has achieved an OEM penetration rate of 50%, it can safely be assumed that there are 10-15 million unsubscribed factory installed radios in the secondary marketplace, which represents an exceptional opportunity that is not going unnoticed by Sirius XM.

Position: Long SIRI

Comments

[jmsithy:]

Aug 3rd is the next earnings date. This will probably drop down to .37 by tomorrow

the next answer to your question about selling I would ride it the day before because the stock will be pumped up to at least .48 then wait til the next day and sell it if it shows a penny being dropped so you dont miss the window / I am using what happen last time after the QTR 1 report this was pumped up by .15 to drop all of it by the next day regaurdless what they earn for the qrter. back in may this was pumped up to .52 before the open of the day of the report to just sell it all back where it was at .35
On Jul 14 01:28 PM Keyscycler wrote:

> Does anyone know when the next quarter's earning announcement is?
> I notice it usually shoots up right before and then doesn't do much
> after except go down, regardless of whether the news is good or bad.
> Is it best to sell on the pre announcement spike?

Jul 14 02:10 PM

[Mr. Stupid:]

I agree totally Keyscycler,

This has been the trend. I don't won't to get caught with my pants down again. There is a hype-up right before the numbers come out since Sirius barely ever hints about the results. Everyone always thinks the numbers are gonna be good and then "squash."

Saying that I will not sell all my shares just in case it does increase but I will sell some to leave myself some cash to buy back if it drops.

Mr. Stupid


On Jul 14 01:28 PM Keyscycler wrote:

> Does anyone know when the next quarter's earning announcement is?
> I notice it usually shoots up right before and then doesn't do much
> after except go down, regardless of whether the news is good or bad.
> Is it best to sell on the pre announcement spike?

Jul 14 03:02 PM

[jmsithy:]

Me too I have this sold in blocks this week on the way up starting at .38 then by .48 I will still have half my stock still invested if it goes on the way back down to reinvest again



On Jul 14 03:02 PM Mr. Stupid wrote:

> I agree totally Keyscycler,
>
> This has been the trend. I don't won't to get caught with my pants
> down again. There is a hype-up right before the numbers come out
> since Sirius barely ever hints about the results. Everyone always
> thinks the numbers are gonna be good and then "squash."
>
> Saying that I will not sell all my shares just in case it does increase
> but I will sell some to leave myself some cash to buy back if it
> drops.
>
> Mr. Stupid

Jul 14 03:15 PM

[Hawk180:]

I noticed that the volume was way down today compared to recent activity. Maybe the heavy shorters are moving on. This can only be good in the long run.

Jul 14 04:10 PM

[Come on Guy...:]

Hey Guys is there anywhere that shows the current shorts shorting siri? Thanks

Jul 14 04:19 PM

[I'm Not Jim...:]

Hawk: If you think anything anybody says on this board, good or bad, moves the stock price . . . then all I have to say is OMG!

Jul 14 04:35 PM

[jmsithy:]

dont be too sure just you wait a week before the earning report you will see the volume jump


On Jul 14 04:10 PM Hawk180 wrote:

> I noticed that the volume was way down today compared to recent activity.
> Maybe the heavy shorters are moving on. This can only be good in
> the long run.

Jul 14 04:51 PM

[Mr. Stupid:]

Siri isn't very "SHAREHOLDER FRIENDLY" when it comes to hints on the financials and when they come out. Seems like they always wait, wait, wait until last minute to make anxious people more anxious. I think I have become one of those people.

Urrrrrrrrr,

Mr. Stupid

Jul 14 05:25 PM

[SIRI-Doom:]

What to do about Q2

We only get one chance to decide how the Q report will effect the price. SIRI will have a 8AM conference call. By the time the market opens the trade queue will be piled with action on the news.

Will SIRI go up or down on the Q report is always a crap shooting game. The company does not provide much information. The only people who know anything are the GS insiders. Even the options chain is distorted by GS hedging. So, we just have no indicators with SIRI. However, I have found the Q report is more bad when Mel holds the reporting date secret and the report is given just before the mandatory date.

IMHO – SIRI will pass on EBITHA, Income, and Coast cutting. This good news will be shredded by 500,000 in paid subscriber loses that will be offset by 250,000 in free trial users. The hype will rip into SIRI lost subscribers. The anal---lists will stay mostly neutral and SIRI will continue to stagnate the 3Q under 48 cents.

In summary – If Mel makes us wait on the report past Aug 1 the 2Q report will be less than good news. IMHO it does not matter, bounce for bounce we will still be under 48 cents during 3Q.

Play the 3 cent spread and try to beat the GS computer.

Jul 14 05:52 PM

[SIRI-Doom:]

LOL did you say NOT SHAREHOLDER FRINDLY hehehhehe

Mel hates stock holders.

He calls us the "Unwashed Unsophisticated"

Mel said "I wish I could take SIRI private"

When Mel gets a chance to milk a penny out of a stock holder, he takes it and then squeezes a second penny. The man is a gangster with no respect for the common stock holder.

Just know it and deal with it. If you want to be in SIRI, Mel is the evil God you must worship.

If you learn his game, you can turn it against him. I do it by beating his computer at Goldman Sacks with 2-4 cent spreads. Beat the GS computer and you beat Mel...



On Jul 14 05:25 PM Mr. Stupid wrote:

> Siri isn't very "SHAREHOLDER FRIENDLY" when it comes to hints on
> the financials and when they come out. Seems like they always wait,
> wait, wait until last minute to make anxious people more anxious.
> I think I have become one of those people.
>
> Urrrrrrrrr,
>
> Mr. Stupid

Jul 14 06:19 PM

[SIRI-Doom:]

I have found the Q report is more bad when Mel holds the reporting date secret and the report is given just before the mandatory date.
If Mel makes us wait on the report past Aug 1 the 2Q report will be less than good news.

Jul 14 06:28 PM

[valuestocks...:]

I have been screaming the used car market for SIRI for 2 years. Now they finally are considering it. SIRI, i will offer my services CHEAP!

Jul 14 06:52 PM

[jmsithy:]

the date is Aug 3rd for the qtr report according to etrade


On Jul 14 06:28 PM SIRI-Doom wrote:

> I have found the Q report is more bad when Mel holds the reporting
> date secret and the report is given just before the mandatory date.
>
> If Mel makes us wait on the report past Aug 1 the 2Q report will
> be less than good news.

Jul 14 07:13 PM

[SIRI-Doom:]

NasQ 1.00 rule and SIRI Rev-Split -- Mel lobbying NasD.

The word from a SEC investigator who does no want to be named.

Mel is lobbying with NasD to lift the 1.00 rule suspension. SIRI lawyers have been in talks lobbying with NasD officials to reinstate the rule.

If the rule is enforced, SIRI must get the share price over 1.00 within (about 90 days). Mel has authority to split (10-50 to 1) only if the rule is enforced and SIRI gets a letter warning of a NasD delisting.

Mel wants the rev-split and would like to announce the split in the 2Q report. Mel has his lawyers lobbying the NasD to get it done.

So, dump on any news of the split. SIRI will be hammered after the split. IMHO, Mel will probably go for the entire 50 to 1 because he knows he is going to get hammered back under the buck at any amount less. (Historically most stocks that rev-split get hammered at first.)

Jul 14 08:07 PM

[SIRI-Doom:]

NasD 1.00 rule and SIRI Rev-Split -- Mel lobbying NasD to get it done.

The word from a SEC investigator who does no want to be named.

Mel is lobbying with NasD to lift the 1.00 rule suspension. SIRI lawyers have been in talks lobbying with NasD officials to reinstate the rule.

If the rule is enforced, SIRI must get the share price over 1.00 within (about 90 days). Mel has authority to split (10-50 to 1) only if the rule is enforced and SIRI gets a letter warning of a NasD delisting.

Mel wants the rev-split and would like to announce the split in the 2Q report. Mel has his lawyers lobbying the NasD to get it done.

So, dump on any news of the split. SIRI will be hammered after the split. IMHO, Mel will probably go for the entire 50 to 1 because he knows he is going to get hammered back under the buck at any amount less. (Historically most stocks that rev-split get hammered at first.)

Jul 14 08:08 PM

[SIRI-Doom:]

NasD has many stocks under a 1.00
To start enforcing the rule is bad for many companies. It is not a good idea for the NasD at this time.

But, Mel has the backing of the US Government to keep SIRI alive for centralized control of the Satellite radio spectrum. That is a lot of power for one God.

Also, It is discussing that the CEO we once trusted is now working dark corners in secret to wipe out our entire investment.

DAY TRADERS BE DAMMED! By lobbying the NasD for a rev-split Mel has made himself an enemy of long term SIRI common stock holders.

Jul 14 08:34 PM

[R A F:]

What a bunch of BS! SIRI-Doom has been alarming the markets about a reverse split for weeks, claiming this is somethng that woud benefit Mel. He has never explained how, exactly, this would benefit Mel - who now has options of 120 million shares at .43, which would be negatively impacted by any such reverse split. SIRI-Doom - How about putting up or shutting up! Explain to all of us exactly how Mel benefits from such a reverse split without hurting himself immensely by negatively impacting the value of his option award.

Jul 14 09:11 PM

[jmsithy:]

I just heard that this stock has some surprises coming up good ones by next week this will be back at .45 and it will hold until 1 more week when the QTR Reports come out, which then the stock will jump to .50 or above, better get back on board or you will miss out

Jul 15 12:16 AM

[Keyscycler:]

Thank You Smitty for taking the time out to answer. I will be working that morning of Aug 3rd, I have TD Ameritrade. Is there a way to put in an order if it drops but not to sell if it keeps going up from opening? I appreciate your time and best of luck!


On Jul 14 02:10 PM jmsithy wrote:

> Aug 3rd is the next earnings date. This will probably drop down to
> .37 by tomorrow
>
> the next answer to your question about selling I would ride it the
> day before because the stock will be pumped up to at least .48 then
> wait til the next day and sell it if it shows a penny being dropped
> so you dont miss the window / I am using what happen last time after
> the QTR 1 report this was pumped up by .15 to drop all of it by the
> next day regaurdless what they earn for the qrter. back in may this
> was pumped up to .52 before the open of the day of the report to
> just sell it all back where it was at .35
> On Jul 14 01:28 PM Keyscycler wrote:

Jul 15 12:44 PM

[cos1000:]

Your kidding, right? Sirius Xm has been planting the seeds in OEM dashboards ever since they decided to partner up with GM, in the XM days, and Ford in the Sirius days..... They are simply starting to harvest investments made, planned, and counted on by both of these companies prior to the merge, and even more now that they have merged.... Two and Three Year leases, and owner turnarounds every two or three years for a new car are just starting to become ripe for the pickings by SXM... The economic and auto downturn has made demand grow as the existing car market ages on a frugal and worried consumer. Any sign of a recovery and the turnaround will increase new car sales, and flood the market with used cars all waiting to be turned on by a second generation owner. Look for much more to come, and much lower SAC as a result of Their Own good planning coming down the road here in the next few months....


On Jul 14 06:52 PM valuestocksonly wrote:

> I have been screaming the used car market for SIRI for 2 years. Now
> they finally are considering it. SIRI, i will offer my services CHEAP!

Jul 16 06:38 AM