Sirius XM: A More than Viable Stock

By Steve Garcia

As we have watched Sirius XM (SIRI) begin to shed its bashed and tarnished negative image and start to show real promise again in the metrics of the company, there are still media people out there willing to try and take a stab at some condescending commentary. It is truly amazing how perceptions are so polarizing and opposite with this company. The truth usually lies somewhere in the middle, and as a shareholder I see a glass half full but there are many who see a glass half empty. What I find most annoying is the stories that come out with a negative slant are only a half hearted attempt at providing real information. Below I have several excerpts from articles which appeared this week and included Sirius XM with what I perceive to be negative connotations. Negatives that are not justifiable, just attempts to scare off the average person thinking about dabbling in Sirius stock at this point. Below are the excerpts I choose to highlight this week.

The following is from a Mike Santoli article in Barron’s entitled ”Don’t Sweat the Junky Stuff.”

For sure, the market won’t keep going up an average of 0.4% a day, as it has since July 13. And aside from the above-mentioned financial stocks, there has been some recent frothy speculation in lottery-ticket stocks such as Vonage (VG) and Sirius Satellite (SIRI), which should serve as a caution flag.

Apparently, Mr. Santoli knows nothing about Sirius XM, and follows the Mad Money windbag of opinion known as Jim Cramer, whose comments have ranged from Sirius should not even be a stock, to Sirius stock should be given to the bond holders. That last part is kind of funny. Why would you say worthless common stock should be given to the holders of the company’s debt…..but I digress. This article uses the exact same language in fact that Jim Cramer used this past week….word for word! It’s nothing less than plagiarism of a joke television show offered as expert financial advice. Barron’s editors should take note. A pink slip is in order.

This next little tidbit is from a Rick Munnariz article at Motley Fool entitled “Apple Fails Sirius XM Again.”

I’m a satisfied iPhone owner. I subscribe to both Sirius and XM. Convergence — at a premium — is no slam dunk. Apple is a developer magnet, with thousands of apps shouting “pick me!” in the App Store. It’s hard to get noticed in a crowd, especially when you’re competing in a realm of fierce, no-cost rivals.” iPhone owners are paying AT&T $20 to $30 a month for unlimited data plans that give them access to free apps including Pandora, imeem, and Time Warner’s (TWX) AOL Music. Wireless isn’t the future for satellite radio. XM has offered limited programming at discounted prices for years through its XM Radio Mobile platform. It’s available through Alltel (AT), AT&T (T), and select models of Research In Motion’s (RIMM) BlackBerry.

What no cost rivals are you speaking of Mr. Munnariz? Pandora is charging $36 dollars a year right now for their ”FREE” service to not have annoying advertising pop ups coming at subscribers. Slacker charges $3.99 a month for unlimited skipping of songs you don’t want to hear and no banner or pop up advertising. Neither sounds free to me, and neither has the content quality and variety you get with Sirius XM. IMEEM and AOL music are a stretch to even include as competition. As for wireless not being the future of Sirius XM, I’ll give you a half correct on that one..but Sirius XM is getting down to business with the internet version of their service. It has a price, but it also has much better content and variety than imeem and AOL music. There are also some terrific radios out there from Tivoli and Grace to take advantage of the premium Sirius internet stream, and a new table top wireless radio was just introduced by Sirius XM on Wednesday last week.

Last but not least, my favorite comment for this past week from “Beware of Penny Stock Profits” by Anders Bylund at Motley Fool.

Moreover, many of these and other penny-stock winners are still extremely speculative. Sirius may still collapse under a capital-intensive business model.

I will simply counter with this, as Mr. Bylund apparently didn’t do his homework before writing Sirius XM into his article. The 2nd Quarter saw a surprise in reduction of sub losses, at a time where the economy was still horrible for the most part, and GM and Chrysler were going through Bankruptcy proceedings. Sirius XM also has managed to pay off its loans from Liberty with new offerings at significantly lower interest than Liberty was, and Sirius XM paid no penalties or fees for terminating the Liberty loans early.

In addition, Cash for Clunkers has done nothing but help Sirius XM’s subscriber numbers leading into the 3rd Quarter. Synergies of the combined company are providing real cost savings, and by his own admission Mel Karmazin was cautiously optimistic based on a very good month of July numbers wise. Now add in the Sirius App for Apple (AAPL) iPhone and the iPod touch, the just revealed skydock, and the ability to pass royalty payments to subscribers, which though slightly negative, is only fair. Think about any cell phone bill and all the government fees. Shouldn’t music artists get paid for giving us enjoyment?

When you put these factors together, along with the fact that Sirius XM has moved most of its debt out to at least 2013, saying Sirius may still collapse and is extremely speculative sure seems like a stretch. As Sirius XM continues to implement its strategies and cost cutting measures it is my contention that Sirius XM will survive and thrive, but what do I know, I look at the facts.

Position: Long SIRI

Comments

[SIRI-Doom:]

For all the newbies

Wait. Wait. Wait.

That is what we will be doing after September 12. We will be waiting forever with frustration for any news of what Mel is going to do.

180 days of wait...

The old pre-merger longs know the story and hopless frustrating feeling of waiting on Mel for news...

It is going to be fun...

Aug 31 05:12 PM

[R A F:]

The stock is technically strong.
The current pause for consolidation of preceding gains is going well and a mildly overbought condition is being wound down in firmly based backing and filling - all positive.
The markets are clearly portraying a fundamental outlook for Sirius XM that is positive going forward.
Just take a look at the power of the rounded bottom that has been formed over the last ten months and decide if you want to stand in front of this train.
Let SIRI-Doom and his comments sit on the railroad tracks and see what happens!

Aug 31 05:20 PM

[WeThePeople:]

I have waited over 1200 days. What's another 180.


On Aug 31 05:12 PM SIRI-Doom wrote:

> For all the newbies
>
> Wait. Wait. Wait.
>
> That is what we will be doing after September 12. We will be waiting
> forever with frustration for any news of what Mel is going to do.
>
>
> 180 days of wait...
>
> The old pre-merger longs know the story and hopless frustrating feeling
> of waiting on Mel for news...
>
> It is going to be fun...

Aug 31 06:02 PM

[SIRI-Doom:]

LOL

Aug 31 06:16 PM

[jmsithy:]

so what do you get in all of this to be so passionate about it. what do you get if you are right what is your agenda in this / if you sold all of your shares what do you care / wouldnt you just move to the next stock to make you money. if this is going to be disasterous I would think you would high tail it out of here and start being concern with the other investments that you have committed to since we know this stock is getting ready for a fall. Sept 12th come and gone just like any other day not which will only matter if a Huge life changing experience is going to happen like a Huge Asteriod is going to hit and wipe us out. But I dont see that coming until Dec 24th 2012 so lets worry about that issue (Have you built your spaceship yet to get off this rock with all your profit from Siri Stock?


On Aug 31 06:16 PM SIRI-Doom wrote:

> LOL

Aug 31 06:28 PM

[JamesPS:]

Best to just ignore Siri-doom. dont even respond to his posts.

Aug 31 06:32 PM

[Commercial ...:]

wow the author is an idiot. even if he had a pro SIRI agenda you'd think he'd come up with convincing arguments. Like countering the entire problem of it's debt structure with an anecdote about how they recently lost less subscribers. And Sontoli was pointing out that tops are usually formed when dumb things happen . . . Mr Garcia certainly helps make this point. I like the SIRI product too, but that's moot to the stock. The product will continue to exist, but the future owners of the firm will not be the current stockholders.

Aug 31 07:53 PM

[hopin:]

SIRI Doom,

You are the only voice of reason among all these "paid pumpers". You are absolutely right about the beating this stock will take if and when rev-split.
I think you should further strengthen your argument by providing a most recent example of rev-split by a famous company with screwed up balance sheets.
I don't want to steal you limelight sir, just a hint for you: It's an insurance company that starts with A and ends with G.

Thanks you sir!


On Aug 31 05:00 PM SIRI-Doom wrote:

> LOL
>
> September 12 SIRI will be noncompliant of the NasDq 1.00 rule. The
> penalty is delisting from the NasDq.
>
> SIRI will have 180 days to trade and close 1.00. Under noncompliant
> rule SIRI must trade cloasing 1.00 for ten days back to back (10
> days consecutive).
>
> After 180 days SIRI can request a hearing. SIRI could get more time.
>
>
> SIRI plan is to REV-SPLIT 10-50 for one share. SIRI will NOT delay.
> IT IS THE PLAN...
>
> NOW TELL THE TRUTH!!!
> Buy 30 shares today and you might not even own one share in December.
>
>
> Zero sum game? Yes, same value but not after SIRI falls again as
> most all stocks do after a rev-split...
>
> THESE ARE THE HARD FACTS...

Aug 31 08:00 PM

[Jerrold Wil...:]

"The old pre-merger longs" ....Forget about the past!!!its over!!!Get over it or just END YOUR LIFE ALREADY!!!Let's move on!!!! I wish there was an ignore feature on this site!!!!!AHHHHHHHGH!!!... STUFF OVER AND OVER!!!

On Aug 31 05:12 PM SIRI-Doom wrote:

> For all the newbies
>
> Wait. Wait. Wait.
>
> That is what we will be doing after September 12. We will be waiting
> forever with frustration for any news of what Mel is going to do.
>
>
> 180 days of wait...
>
> The old pre-merger longs know the story and hopless frustrating feeling
> of waiting on Mel for news...
>
> It is going to be fun...

Aug 31 10:13 PM

[Mr. Stupid:]

Nice writing style there Marc. I like how you put your words together and actually makes me want to read your whole post. I understand your concern here and it's valid. Anyone can start a blog with an agenda and fill it with emotion. Emotion is what drives many investors and bloggers know this.

Including myself, most Siri type investors are emotional rollercosters but their nice sweet people and a little gullable might I say.

These bloggers are smart in that they know the kind of investor that reads blogs and then makes an uneducated trade the next day based on the blog sentiment.

I imagine that PRO-investors don't even read blogs where their more apt on the numbers and HARD evidence of a buy or sell.



LOL


On Aug 31 09:43 AM Marc Gerstein wrote:

> I find this article disappointing.
>
> The author has a very definite and fixed pro-SIRI agenda. It would
> seem that his platform, Satwaves.com, will cease to exist if SIRI
> vanishes. That, by itself, is not a condemnation. Agendas are commonplace
> on Wall Street, like everyplace else, but they do put readers on
> guard and cause those of us who are more neutral to look harder for
> facts. This article was not completely devoid of facts, but they
> were overwhelmed by his anti-Barron’s, anti-Motley Fool, and anti-Cramer
> rants. The latter even leaves me to wonder if the facts presented
> here were in context, or just random tidbits pulled to make a counter
> argument.
>
> Steve, the question of SIRI’s future is a fascinating and challenging
> one. Since you seem to follow the company closely, might I request
> a follow-up article strictly on SIRI; just an analysis of the company
> and nothing at all on the emotions and agendas surrounding it. <br/>What’s
> what now with SIRI’s subscriber counts, new signups, churn, pricing,
> etc. How does the cost picture look, not just capital costs but day-to-day
> operating and marketing costs?
>
> I haven’t looked closely at SIRI in a few years (pre-XM merger) ,
> and am curious as to where it now stands. If you want to help people
> understand a bullish case for SIRI, then please present one – sans
> the bear-bashing rants.

Aug 31 10:46 PM

[Reds:]

i feel more confident after reading your articles. i am going to long it whenever market is going to correct.

Sep 01 12:02 AM

[aarc:]

If AIG is going to be the model for SIRI reverse split.

Let's see what happened to AIG.

AIG was rev splitted at around $26.60 so I sold my holdings immediately the second day at around $24 after learning of the split.

AIG went straight down to $8.22. It was a punishing ride for AIG shareholders.

I was not able to buy back my shares waiting for a better price before it went parabolic up to $55.90 high of last week. That was more than twice where I left off. With exceptionally strong volume support for AIG this August; AIG still has a very high probability to rally up to $75 to $95 range before it will require a major pullback or correction. More than 3x where I left off.

Would SIRI want to suffer same fate as AIG plunging from $26.60 to $8.22 after a reverse split?

SIRI has enough time to wait and see and $1 is not too far away from the current price of $0.67. In the next two months, SIRI can easily reach $1.24 to $1.46. Then spend another 2 to 3 months consolidating between $1.46 to $1.02 and it can rally again to $1.82 to $2.54. All within good time.

I hate chasing stocks; so just in case SIRI does an ill-timed rev split; I'll buy more on a reverse split and a price plunge if it happens. I've learned my lessons with AIG.

Sep 01 01:47 AM

[I'mgettinmine:]

well said my man!

Sep 01 11:03 AM

[J Stew:]

SIRI charges for a product that most people can get for free (local talk radio, pop music). I will never pay X dollars a month for something that I can get for free.

Further, the iPhone allows users to access vast unique downloaded music databases for free with a simple car hook-up.

If this company ever gets to $1, I'll short it with my life savings.

Sep 01 01:53 PM

[hopin:]

Do you never buy water bottles because you get water for free?
Even if you don't, does no one buy them? especially when they are on the road? Ever heard of the word 'Convenience' or 'Content' ?


On Sep 01 01:53 PM J Stew wrote:

> SIRI charges for a product that most people can get for free (local
> talk radio, pop music). I will never pay X dollars a month for something
> that I can get for free.
>
> Further, the iPhone allows users to access vast unique downloaded
> music databases for free with a simple car hook-up.
>
> If this company ever gets to $1, I'll short it with my life savings.

Sep 01 02:47 PM

[hopin:]

Better still,
Do you never buy soda because you get water for free?


On Sep 01 02:47 PM hopin wrote:

> Do you never buy water bottles because you get water for free?<br/>Even
> if you don't, does no one buy them? especially when they are on the
> road? Ever heard of the word 'Convenience' or 'Content' ?

Sep 01 02:48 PM

[r5r5r5:]

"The dumb dont need there money" - inadvertent ? Oxymoronic?
in any case , a moment of true humour and relief during the painful readings here. Thanks


On Aug 30 12:54 PM relmar2003 wrote:

> Nice article Steve. Yes, these shrills will all be proven wrong,
> and anyone who knows how to play they game knows what going on here.
> For those who dont, I will explain it to you. When a stock is topping
> out, every wall street dishrag loves it. When its at the bottom,
> they will use every tactic and lie in the book to keep you from buying
> it. Thats how it works, to various degrees and conditions. Sure sometimes
> a bashed stock will never recover, and sometimes a buy recommendation
> by the shrills may in fact work out for you, for a bit. But never
> trust any nationally publicized dishrag as absolute fact, or useful
> information. Always go and do your own work, and read everything
> there is to know about any stock in which you are investing. And
> if your going to buy a stock for longer thna 4-6 months, and you
> dont read the SEC filings, etc.. You deserve to invest poorly. Why
> did you buy GE at $30? O, the Barrons said it was a good buy. You
> deserve what you get. The dumb dont need there money.

Sep 01 08:12 PM

[siriusaldo:]

ONE IMPORTANT FACTOR THAT MANY OF YOU SHOULD KNOW, 18 MILLION SUBSCRIBER'S AND THE ONLY SATELLITE RADIO IN THE USA, YOU CAN ONLY BE A < FOOL > NOT TO GET ON THE WING OF SIRIUS XM, IS GOING TO FLY AND PROSPER, LIKE IT OR NOT.

Sep 01 10:41 PM

[relmar2003:]

OMG, where to start. Favorites first.
Siri-Dumb. Ive made 1000 percent on some of my purchases with this stock. Maybe you and the author of the Motley Fool article should get together and collaborate, the on that wrote "Be Afraid Of Penny Stock Profits". As you are afraid of penny stock profits, by not buying this stock, yet you keep bashing it, you should work nicely with her. YOu can both drool on each other, and make sand castles.

Mr. Marc Greenwhatever...
You have a lot of nerve bashing an author who clearly shows you the lies and negative bias towards this company. Do you really think you can show up here, but two sentences together, and convince anyone? LOL LOL
You're a joke. You defend who this author is defending? You lost any credibility you may have garnered with your comments. There is no defending these articles, or there weak points. If you dont want to buy the stock here, dont. I dont care.

Jswede, your about as ignorant as they come. You are a disgrace to still be posting here. Didnt you get embarrassed enough on all our TERRIBLE calls last year? I guess not. Well Im up 1000 percent on this stock on my lowest buy. Not bad. Good thing I didnt listen to you. Never listen to ANYONE who posts about a stock on a blog site or forum or article that doesnt own it, but took time to bash it. Immediately red flag that, and check all facts. As you should check all facts from stockholders, as they are obvioiusly bullish for a reason.
Blog sites could give a rats ass if you buy the stock, but if you do, heres what you need to know. Blogs, forums, articles, etc.. dont move the stock one cent. I have never taken one second of my time to think my opinions could affect the price. I do it because I want people to understand the facts about a company. Period. Wow, what an evil agenda. Go ahead and sell the stock. I dont give a rats ass. Your loss. I do trade a portion, I am not married to it, but its so grossly undervalued still, its not even funny. Market cap is a joke right now.

Hey Marc G. come debate me in an open forum, and Ill have you buying shares by the end of the day.

Sep 02 12:26 AM

[Mr. Stupid:]

As all you little Siri buzzers can see I'm back in the saddle with my predictions. Please read below. I see .55 as next point of buy.

Get in or Get out,

Mr. Stupid


On Aug 30 03:07 PM Mr. Stupid wrote:

> Yes, but there are also some big institutional HOLDERS of the stock
> with confidence it will rise. Even some with short positions have
> shares they are holding. That's the game of trading and these big
> time institutions losing 75million doesn't even strike a dent in
> these companies. In the past 12 months many of these companies have
> gained billions in short positions just like the institutions that
> started shorting Siri when it was at 3 bucks.
>
> Even though the uptrend has been promising I see a pull-back at .55.
> This will be opportunity for new investors to creep in and push it
> forward.
>
> I'm long Siri and look forward to better days.
>
> Mr. Stupid
>
>

Sep 02 11:38 AM