Sirius XM Radio Attacked Unfairly by Media

By Brandon Matthews

There is really no other way to describe it. It’s been a tough week for shares of Sirius XM Radio (SIRI) and the only reason that I can find for the recent drop in share prices is an apparently coordinated attack by various media sources. The level of disinformation, misleading headlines, outright lies and the dissemination of old news as new has reached a level that is simply overwhelming. Some of these false reports appear criminal in nature, and yet the volume is such that the company is rendered helpless as any fight the company might wage would cost far too much and take far too much time to make any real difference.

Are Sirius XM Radio insiders selling shares?

Making headlines this week are allegations by self proclaimed insider trading experts that Sirius XM Radio executives are selling shares. These are false allegations. Following the merger of Sirius and XM, and as executive compensation came under fire in light of AIG bonuses earlier in the year, Sirius XM Radio issued bonuses to its top people after successfully navigating the merger fiasco created by the FCC, in the form of company shares. In most cases, people receiving holiday bonuses or incentive compensation such as a commission check are able to deposit that money into their bank accounts. Sirius XM went a different route in which the company’s executives adopted a 10b5-1 plan. Apparently, these self proclaimed insider trading experts that are publishing false information missed this particular class at insider trading school.

Under such a plan, sales are planned over a set period of time. The plan itself is a means of avoiding insider trading accusations. Once set in motion, shares are sold incrementally and the sales are required. The executives do not get to decide on when they will sell, or at what price. It does not matter what they do or do not know. We have known about this since May when the plan was filed with the Securities and Exchange Commission and have been following closely on the Satwaves forum. For those that question the source of those shares, it has been quickly forgotten that Sirius XM Radio’s CEO Mel Karmazin voluntarily gave up his own options so that bonuses could be paid to his top people. Looking deeper into the holdings of these executives, it is clear that the “accused” will continue to hold substantial positions outside of these bonus shares and that no shares of these core positions have been sold by any executive at Sirius XM Radio.

Royalty Fee…Deceptive?

Not content to attack the company from an investment perspective, even the Associated Press published a misleading article last week that other self proclaimed news organizations have been all too happy to republish. In what can only be described as the worse piece of journalism in the history of the AP, a reporter called a royalty fee “sneaky” and then retracted the word several hours later without so much as a retraction notice or apology. A little too late as other news organizations picked up the story through a feed and ran with it.

Anyone who has an issue with musicians and artists being paid for their work is sneaky. Clearly this type of person is likely to steal music off of the Internet through illegal downloads rather than pay 1.00 to legally own the material. If that were not the case, these same basher type journalists would not have an issue with a mere 1.99 royalty fee. Terrestrial Radio passes on these costs also, in the form of extra commercials. That is sneaky. Sirius XM has been up front about this fee before it became reality back in July of this year. Why are we hearing about it again now? Good question! Satellite Radio opponents are hopeful that cancellations will occur over such a “sneaky” issue.

Bankruptcy…Say it’s not so!

It’s not so! There is absolutely no chance that Sirius XM will file for bankruptcy in the next 12 months no matter how many polls are supposedly conducted by outfits like TheStreet.com, which not only published its poll results, but retitled the headline and republished the same article twice on the same day. Simply put, Sirius XM has absolutely no debt issues prior to the year 2013 that could cause such an event to occur.

In an ironic twist, Satwaves is currently conducting a poll asking which companies are likely to go bankrupt in the next 12 months. As of Thursday morning, our survey indicates that an overwhelming 97% of respondents feel that Jim Cramer’s TheStreet.com (TSCM) is the most likely company to file for bankruptcy protection in the next 12 months. With all the garbage articles spewed by the faltering company, it’s not surprising that news such as TheStreet.com’s recent delisting notice and failure to timely file results with the SEC get buried under news searches for the company. Buyer beware! TSCM is probably the best short play on Wall Street right now. Sirius stands at only 2%, just 1% more than Wal-Mart (WMT).

Position: Long SIRI

Comments

[R A F:]

The relentless barrage of misleading and negative articles about Sirius XM certainly appears to be well coordinated with the manipulation of this stock that has been evident to legitimate investors for a long period of time (beginning with the massive Naked Short selling of SIRI in 2008, resulting in substantial open interest on the short side that persists to this point in time). There is no doubt that this manipulation is designed to keep pressure on the stock by those holders of short positions who are now being severely punished by the sustained recovery that began in earlier this year, in February, as the prospects of Sirius XM brightened considerably and several positive developments of consequence became apparent to investors. Despite the obvious beneficial impact of these major developments - resurgence of the auto industry, exciting new wireless devices and applications, etc. - the media attacks noted in the above article have consistently denied their existence and, instead, placed heavy focus on the outdated and refuted stories of "imminent bankruptcy, imminent potential for a reverse-split, unwarranted insider selling by executives", etc.
Despite this major media attack, the stock has held firm on pullbacks, consolidating gains along the way, while holders of remaining excessively large short positions continue to use this psychological pressure for purposes of covering before their losses carry further. This type of concerted manipulation has been well documented recently, in the extensive article by Matt Taibbi in the current edition of Rolling Stone, titled "Wall Street's Naked Swindle". The combined tactics of Naked Short selling, Flash Trading, and well placed false and misleading rumors within the media have all been thoroughly exposed in this article and it is required reading for all investors concerned with the legitimacy of the markets and the necessary oversight by the SEC that remains lacking to this day.

Oct 09 07:17 AM

[fence4u2:]

Fantastic article Brandon.

Oct 09 07:18 AM

[Satwaves:]

The poll can be found here....

www.satwaves.com/forum...

Oct 09 07:20 AM

[RichM12345:]

I'm in for SIRI LONG TERM!!!

Oct 09 07:58 AM

[underway:]

very good article....and that's great info on the exec stock sale, a little known fact concerning the pre-determined sale date. I have not seen that info anywhere before, so it's good to get the word out. thanks.

Oct 09 08:15 AM

[PROTECT AND...:]

Best article written Brandon!!!!! your so on the money!!!

Oct 09 08:27 AM

[PROTECT AND...:]

I still think that Siri/XM should file suit against the street.com and other media for making false statements, and trying to short the stock.. Even if it takes years it will show that Siri is not playing around and this media bashing of Siri will stop.

Oct 09 08:32 AM

[siriusaldo:]

great article Brandon,
If it wasn't for you, many more will have bin scared to buy or sell siri.
i believe that the only way to fight them, is to dispute their
misleading headlines, outright lies and the dissemination,
to immediately rebottle them the moment they publish the Bs
against Sirius xm,
siri stock holders need confidence that the company is fighting for them.


thanks again for your great work

Oct 09 08:36 AM

[jmsithy:]

anyway you look at it a sell is a sell profit is a profit anyway you look at it. Seeking Alpha has voiced its oppinion, but this will not change anything

Oct 09 08:37 AM

[BarryMdtn:]

How can anyone be at least even with their investments in Siri unless they keep buying at current market prices and averaging their losses.
I'm a firm believer that there is light at the end of the tunnel and continue to stay strong to my belief that Siri is a good investment. Do I have any other believers here?

Oct 09 08:53 AM

[siriusaldo:]

great article Brandon,
If it wasn't for you, many more will have bin scared to buy or invest in siri.

i believe that the only way to fight them, is to dispute their
misleading headlines, outright lies and the dissemination,
to immediately rebottle them the moment they publish the Bs
against Sirius xm
siri stock holders need confidence that the company is fighting for them. In addition their Bs is being published as news, and we only see rebottle as a blog once in wile, Sirius xm need to fight fire with fire.
thanks again for your great work

Oct 09 08:55 AM

[Scooterpod:]

And you are exactly the type of person that is an accomplice to these illegal types of market manipulation. You spread baseless, against-the-fact lies, innuendo and the like. You should try this with another stock, because your attempts are futile.

Oct 09 09:01 AM

[valuestocks...:]

Did you read what you wrote smithy. What a bunch of frickin gibberish.


On Oct 09 08:37 AM jmsithy wrote:

> anyway you look at it a sell is a sell profit is a profit anyway
> you look at it. Seeking Alpha has voiced its oppinion, but this will
> not change anything

Oct 09 09:02 AM

[Scooterpod:]

oh, and tht comment was aimed at jsmithy/SIRIDOOM/ etc.

Oct 09 09:02 AM

[pirranna:]

Got in in the mid .30's and just loaded up with another 10K at .53 . This is a gift at this price, Load up when you can !

Oct 09 09:05 AM

[Pell:]

I'll say it again! This stock is a chance is a lifetime for the common Joe. Years ago Brokers had the upper hand telling all of us what to do with our money. Now after the crash most of us took matters into our own hands and did our own research while investing our own money. Behind the scenes Siri Stock would have flown below the radar as a penny stock with no positive buy action. Now the Common Joe has educated himself, did the research and figured out on our own this is a good investment. These so called professionals are suffering in their position and are trying to correct their mistake with a barrage of repeated allegations and sometimes false rumors. Sorry brokers of the world your services may not be needed very much in the future. The more we educate ourselves the less we have to listen to these self loathing fakes on TV and print media. Thanks SATWAVES and others for giving us information so we can make our own decision.

Oct 09 09:29 AM

[Pell:]

There are a huge amount of investors who are waiting for the "Longs" to panic. DO NOT PANIC! Hold strong or buy more. They are trying to wait us out. The last two days activity on this stock has been low in comparison to previous days and weeks and even months. Call the bluff and stay strong! They got their chance at the low 50s. They should have taken it, but didn't. This stock for the short now has turned into a poker hand. THEY ARE BLUFFING!


On Oct 09 08:53 AM BarryMdtn wrote:

> How can anyone be at least even with their investments in Siri unless
> they keep buying at current market prices and averaging their losses.
>
> I'm a firm believer that there is light at the end of the tunnel
> and continue to stay strong to my belief that Siri is a good investment.
> Do I have any other believers here?

Oct 09 10:39 AM

[jswede:]

speaking of misleading..... "There is absolutely no chance that Sirius XM will file for bankruptcy in the next 12 months...Simply put, Sirius XM has absolutely no debt issues prior to the year 2013 that could cause such an event to occur."

Simply put: BRANDON MATTHEWS IS LYING TO YOU.

Sirius makes ZERO money, yet has the following debt obligations (principal+interest) BEFORE 2013:

$371mil in Dec 2009
$398mil in 2010
$691mil in 2011
$518mil in 2012

all this BEFORE the $2bil bomb in 2013....

Oct 09 10:43 AM

[ddmunds:]

Pell your so right, we have to hang in there and call there bluff.!! Speaking of insider selling check out the STREET COM web site, all the transactions since March have been insider selling!!

On Oct 09 10:39 AM Pell wrote:

> There are a huge amount of investors who are waiting for the "Longs"
> to panic. DO NOT PANIC! Hold strong or buy more. They are trying
> to wait us out. The last two days activity on this stock has been
> low in comparison to previous days and weeks and even months. Call
> the bluff and stay strong! They got their chance at the low 50s.
> They should have taken it, but didn't. This stock for the short now
> has turned into a poker hand. THEY ARE BLUFFING!

Oct 09 10:44 AM

[Pell:]

Ok jswede explain your numbers and to whom this money is owed. We will all will be waiting holding our breath. Make sure you include YTD info not old news. We're waiting.

BLUFF!


On Oct 09 10:43 AM jswede wrote:

> speaking of misleading..... "There is absolutely no chance that Sirius
> XM will file for bankruptcy in the next 12 months...Simply put, Sirius
> XM has absolutely no debt issues prior to the year 2013 that could
> cause such an event to occur."
>
> Simply put: BRANDON MATTHEWS IS LYING TO YOU.
>
> Sirius makes ZERO money, yet has the following debt obligations (principal+interest)
> BEFORE 2013:
>
> $371mil in Dec 2009
> $398mil in 2010
> $691mil in 2011
> $518mil in 2012
>
> all this BEFORE the $2bil bomb in 2013....

Oct 09 10:49 AM

[Same as Poker:]

Just a small comment on the street. They have had ridiculous amounts of high level executive turnover in the last year. They can not form / integrate effective strategic partnerships because their people keep leaving (speaking from experience). This does not bode well for the future of their racket.

IMHO they attack SIRI to capitalize on the fact that SIRI is one of the most widely held "retail" stocks. They create and regurgitate sensationalist stories in order to get the millions of shareholders to their site. This translates into millions of impressions for their advertisers per year.

If we assume:

The cost per thousand (CPM) rate for advertising on their site is $15
They have three ads per page where SIRI appears
They publish 2.5 stories a week on SIRI (130 per year)
Each story gets 50,000 page views

Then we can calcuate (130 * 50,000 * 3 * $15) / 1000 = $292,500/year

If we would simply ignore them and stop reading their garbage they would lose ad revenues, go insolvent, and stop their bs once and for all. Once they see fewer impressions I have a strange feeling their journalistic biases will change.

So - in short, BOYCOTT thestreet. By reading their articles we are subsidizing their slander.

Disclosure - yep, quite long on SIRI.

Oct 09 11:08 AM

[ZenInvestor:]

Good recap of the nonsense, but I predict it will continue until SIRI reports a quarterly profit or two. All of this is 'noise' meant to confuse the market. I can't 'know' the motives of these folks, but it is suspicious.

Oct 09 11:15 AM

[Satwaves:]

With 2.4 BILLION in annual revenues, no debt is a concern until 2013.

Fact.

Oct 09 11:54 AM

[Ralph Hunkey:]

Good comment's,,,,,,,,,I will buy more SIRI today......I will stay with it.....It is good to read good comments that may make sense....Viva, SIRI

Oct 09 11:56 AM

[1more4me:]

*EDITED*

On Oct 09 10:43 AM jswede wrote:
There is absolutely no chance that Sirius XM will file for bankruptcy in the next 12 months..Simply put, Sirius XM has absolutely no debt issues prior to the year 2013 that could cause such an event to occur.

> Simply put: JSWEDE IS NOT LYING TO YOU- he's just taking 1 page of a 80 page 10Q and implying that this one set of numbers is the only math that matters and we should ignore the other 79 pages of junk like asset valuation, operating expenses, reduction in subscriber cost, etc, etc...and most obviously that:
>
> Sirius had 1.7 Billion in Revenue in 08', expects to meet 2.5 Billion in Revenue at the end of 09' and expects 2.7 Billion in 2010, yet only has the very minimal following debt obligations (principal+interest) BEFORE 2013:
A measly:
> $371mil in Dec 2009
a miniscule
> $398mil in 2010
and a teeny weensy
> $691mil in 2011

So, although they have some debt due like every other company that capitalizes on the use of debt as forward leverage- they have NO concerns meeting them until the-
$2bil bomb in 2013....

Thanks knucklehead for the one sided opinion- You too are now eligible for a Nobel Peace Prize... I hear they give them out for cheap these days...

Oct 09 12:02 PM

[Pell:]

Thanks SATWAVES for the comment and putting all the info in the proper light. This is the information that is helpful. And thank you 1more4me.


On Oct 09 11:54 AM Satwaves wrote:

> With 2.4 BILLION in annual revenues, no debt is a concern until 2013.
>
>
> Fact.

Oct 09 12:44 PM

[Mr. C:]

Brandon in lite of your comment I do agree with everything you said except for the insider trading. sirius xm is not AIG and did not get any government money, so theirfor they could compensate their executive's anyway they wanted to. Its a shame that these spineless executives chose to sell shares at that rate 7 million in a matter of a few months. I hope its just because they need the money, and not that their bailing out.

Oct 09 01:05 PM

[Neal Barkett:]

Brandon, A blogger from Germany replied back to me saying that both himself and his brother - in -law are Sirius Xm subs. I would of course assume they are recieving their feed via the internet. The reason I bring this up is that Siri Doom claims that people outside the US,Canada & Mexico are the only palces where Sirius Xm can sell subs to. I would like to get clarification on this matter. Could you expand on what currently are the possibilities with the sales via the internet internationally? Thanks, Neal

Oct 09 01:30 PM

[Neal Barkett:]

Brandon, I of course ment inside the US, Canada & Mexico are the only places. Sorry

Oct 09 01:32 PM

[Neal Barkett:]

(Meant) Having brain problems today .

Oct 09 01:33 PM

[Mr. C:]

Brandon can you please reply to Mr. C

Oct 09 04:20 PM

[SouthernBea...:]

Totally agree, Sirus should follow the lead of Hertz and let these So Called Media outlets know that they aren't going to allow Slanderous articles. After The Street & Fool have to pay attorneys fees a couple times they'll move on to lying about other companies.


On Oct 09 08:32 AM PROTECT AND SERVE 0310 wrote:

> I still think that Siri/XM should file suit against the street.com
> and other media for making false statements, and trying to short
> the stock.. Even if it takes years it will show that Siri is not
> playing around and this media bashing of Siri will stop.

Oct 09 04:28 PM

[SouthernBea...:]

What do you mean they make zero money..... that statement takes away from your creditability. The have debts like every other company, but that is off set by $2 Billion a year in Revenue and growing. One of Sirus's main Competition, over the air Radio, is in debt of $20 Billion. why don't you go find their Board and Bash them? You distort the Truth.


On Oct 09 10:43 AM jswede wrote:

> speaking of misleading..... "There is absolutely no chance that Sirius
> XM will file for bankruptcy in the next 12 months...Simply put, Sirius
> XM has absolutely no debt issues prior to the year 2013 that could
> cause such an event to occur."
>
> Simply put: BRANDON MATTHEWS IS LYING TO YOU.
>
> Sirius makes ZERO money, yet has the following debt obligations (principal+interest)
> BEFORE 2013:
>
> $371mil in Dec 2009
> $398mil in 2010
> $691mil in 2011
> $518mil in 2012
>
> all this BEFORE the $2bil bomb in 2013....

Oct 09 04:36 PM

[marc e poo:]

Sirius can "package" these insider sales anyway they want and call them what they want but they are still sales-planned or not. The issue should be the size of these bonuses. Has anyone here totaled these up YTD to calculate the size of the "bonuses"?....they are astronomical!. I think it is James Meyers who will receive $1.7M? in bonuses? ( I admit I am doing this from memory and could be wrong to a certain extent). Also,this doesn't explain all the other insider sales that have taken place over the past 3 YEARS. Why not post an article about the insider sales over that time period.

Oct 09 09:33 PM

[User 473272:]

Great article of truths Brandon ! ! !

It's ironic but TheStreet.com released it's poll on the companies they believe have the highest possibility of filing bankruptcy in the near future and then just a couple days ago Cramer recommended Hertz as the best buy among the rental car companies. Lawsuit worries? YOU THINK !

The short interest in SIRI is definitely waning as noted today by Reuters. A copy of their article is below and shows a large reduction in short holdings by the bears.

Keep the great true articles coming and everyone stay the course and we will be greatly rewarded.

Position: Long SIRI

us.rd.yahoo.com/financ...

NEW YORK, Oct 9 (Reuters) - Short interest in U.S. stocks fell in late
September, the Nasdaq and New York Stock Exchange said on Friday, suggesting a
decrease in bearish sentiment among equity investors. For story, see [ID:N0989890] Below are the five Nasdaq stocks that experienced the largest increases and
decreases in their short positions from mid-September to the end of the month,
according to data released by the exchange. The five companies with the largest overall short positions are also
listed. Settlement is as of September 30, compared to the previous period ending
September 15.
COMPANY CURRENT PREVIOUS NET CHANGE PCT CHANGE
----------------------... -------------------------------------------------
FIVE BIGGEST INCREASES:
DirecTV(DTV.O) 119,132,951 83,943,962 35,188,989 41.9
Citizens Republic(CRBC.O) 47,459,157 28,296,201 19,162,956 67.7
Xoma (XOMA.O) 18,625,894 8,794,114 9,831,780 111.8
Charming Shoppes (CHRS.O) 13,873,741 6,660,423 7,213,318 108.3
Microsoft Corp (MSFT.O) 82,066,961 75,488,999 6,577,962 8.7

FIVE BIGGEST DECREASES:
Huntington (HBAN.O) 25,145,665 55,794,047 -30,648,382 -54.9
Sirius XM Radio (SIRI.O) 89,294,197 106,452,719 -17,158,522 -16.1
UAL Corporation (UAUA.O) 21,012,762 28,436,501 -7,423,739 -26.1
News Corp (NWSA.O) 25,458,305 31,949,464 -6,491,159 -20.3
Omniture Inc (OMTR.O) 3,828,635 9,799,150 -5,970,515 -60.9

FIVE BIGGEST POSITIONS:
DirecTV Group Inc (DTV.O) 119,132,951 83,943,962 35,188,989 41.9
Sirius XM Radio (SIRI.O) 89,294,197 106,452,719 -17,158,522 -16.1
Level 3 (LVLT.O) 83,966,006 87,764,485 -3,798,479 -4.3
Microsoft Corp (MSFT.O) 82,066,961 75,488,999 6,577,962 8.7
E*Trade Financial (ETFC.O) 73,456,519 72,391,185 1,065,334 1.4 (Editing by Andrew Hay)

Oct 09 09:54 PM

[R A F:]

The steady decline in short interest indicates the "pros" - who are mostly responsible for the manipulation of this stock - are covering their short positions in recognition of the increasingly positive fundamental outlook emerging for Sirius XM into the future. Once all short positions have been covered and long positions are established by these institutions, we can probably expect more aggressive upside manipulation to be seen. This indicates support should be expected to remain firm on any near term pullbacks and this current dip should be seen as a buying opportunity. Any near term pullbacks below .55 should meet stronger underlying support now that the reduction in short interest confirms the "pros" are using the current declines to cover their positions - an indication of more favorable sentiment and expectations. .

Oct 09 10:12 PM

[Neal Barkett:]

RAF: Can you answer my question? Do you know if Sirius Xm programing be recieved & sold to people overseas via the internet ?

Oct 09 10:35 PM

[R A F:]

Neal - I am really only a technical analyst on the trading side - not someone who can answer the basic question about programming that you have asked. But - based on all other comments I have seen on these pages, I believe Sirius XM programming can be received worldwide via the internet. Perhaps Brandon, or one of the other experts on this medium will respond more thoroughly to your question.
On Oct 09 10:35 PM Neal Barkett wrote:

> RAF: Can you answer my question? Do you know if Sirius Xm programing
> be recieved & sold to people overseas via the internet ?

Oct 10 12:10 AM

[GeorgeS:]

About international reception, it seems the man from Germany didn't explain it enuf. I'll bet he meant they got their (there?) subscription because of there (their?) US residency connection. Someone outside US will get a computer message "not available in your country". It's (its?) available in Canada because companies were set up there (their?) with proper arrangements.

Your in luck.
You're horoscope is positive.

Oct 10 12:59 AM

[Satwaves:]

Sirius XM are available worldwide on the internet feed.

Oct 10 04:04 AM

[Neal Barkett:]

Brandon, then anybody with a computer and a credit card and is aware of Sirius Xm that lives abroad can become a Sirius Xm subscriber? If so isn't this a very huge potential?

Oct 10 08:27 AM

[JohnDoski:]

Attention Sirius executives:

ADVERTISE FOR GOD'S SAKE!

Oct 14 08:25 PM