Positive Cash Flow Signals New Era for Sirius XM 63 comments
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By Brandon Matthews
Yesterday, Sirius XM Radio (SIRI) reported its third quarter results, which can only be described as outstanding by any measure. Subscriber growth has returned, revenue has increased, costs continue to fall as any future liquidity questions have now been put to rest.
As critics attempt to spin the results, much like a sports fan would blame a referee for a favorite team’s loss, they ignore the most important facts that the company has now achieved positive free cash flow and cash flow break-even. This while beating earnings expectations by .02 per share. All of this has been achieved in just over 1 year since the merger of the two satellite radio giants, demonstrating the futility of betting against the future success of Sirius XM Radio.
Nothing worth having or doing ever comes easy. The N.Y. Yankees just won the World Series, but it took time to get there. There was doubt and fear earlier in the year. Injuries, losses and other obstacles that needed to be overcome. In the end, not a single critic nor their combined assaults were able to prevent the 2009 Yankees from realizing their destiny. Likewise, the verbal assaults that will no doubt come today from Sirius XM critics will have little in the way of fact and much in the way of misplaced negative speculation. Facts don’t lie. People Do.
We now begin a new era, as Sirius XM can no longer be justified as a radio company and compared to the likes of Clear Channel and other failing radio companies. The satellite radio provider has leapfrogged its way into a new weight class of subscription-based companies such as DirecTV and Comcast (CMCSA). Cash flow breakeven and free cash flow cannot be ignored. It cannot be denied. It means that all future growth will go directly to the bottom line, which means company shareholders will reap the rewards of victory.
As of Friday, shares of SIRI remain on sale at .62. Tuna Amobi of Standard & Poors has a 1.00 price target on the equity. Jim Goss of Barrington Research Associates has provided a target of 1.30. The current quarter looks to be the most promising quarter in the company’s history, as a new nationwide branding campaign is about to begin and retailers such as Apple (AAPL), Best Buy (BBY) and RadioShack (RSH) promote new satellite radio products. By December, everyone in America will know that Sirius XM Radio is here to stay. Demand will increase. Churn will drop. Retail will again be on the rise.
For the critics that remain, the game is about over. The clock is running out and they have no timeouts left. All they can do now is grab a face-mask and hurl insults as they cry of their misfortune. Enjoy the victory Sirius XM. You’ve earned it.
Disclosure: Long SIRI
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As far as the Howard Stern website offering his show. You are correct, you can listen to his show through the web. However, once again your ignorance is obvious. You register and can access the SIRIUS ONLINE PLAYER! You can't listen to a live HOWARD STERN program without a SIRIUS account. Do you really think SIRIUS XM would pay him 100 million a year and then allow the show to be streamed for free over the net, or with an app for free? You seem to be in love with the idea of iphone apps destroying SIRIUS XM. Yes, they have 1000's of apps for iphone/ipod...one being a SIRIUS XM app. People that want variety and great exclusive content will get SIRIUS XM...People that are happy with an "app" will get an app such as Pandora. All I will say to that is, find an app that compares to SIRIUS XM content. Don't tell me what you feel is coming. I explained why there won't be viable competition any time soon...too expensive for competition. Again, people don't have to choose iphone or satelite radio....Having both is the ultimate in audio entertainment. You act like Mel Karmazin is the sole program director and because he is old, he only gets programming for old people.
I personally am a Hip Hop lover. Their selection of DJ'S and personalities are the best in the world for that genre. I don't think Mel K was personally responsible. he hires people with knowledge about that genre and they do the job. lol...Somehow, I don't think Mel Karmazin was the one that picked Kay Slay the Drama King, or DJ WHO KIDD to host shows.......He hires the people that have the knowledge..Check Shade 45 or Hip Hop nation....I challenge you to tell me that is a station for "old people" lol....compare those channels to catholic channel, and you will see why SIRIUS XM is a great service....VARIETY OF CONTENT!! A company that has Al sharpton with a daily show is accused of having a right wing conservative agenda? The Virus, Howard Stern, SHADE 45, their comedy channels are far from conservative radio. They have America Left, America right....The variety of programming is amazing, and cant be matched with some Iphone app.....Now or anytime in the near future......Stop saying Satelite radio....The company is SIRIUS XM...they offer SIRIUS XM internet radio, SIRIUS XM Satelite radio. They sell content not satelite....There is a SIRIUS XM app..So if Apps take over the world as you keep saying ..great....SIRIUS XM is included with that......move on! Next you will tell me that COMCAST will go out of business because there will be a free iphone app, where you get all the tv channels for free....give it a break!
I am pleased to quote you Between the hedges.
But I have to say I am seeing comments concerning "dilution of shares" and your comment, but when I said it all I got was thumbs down. hmmmmm
No comment.
Srir Long
On Nov 09 03:31 PM between the hedges_ wrote:
> Howard is excellent, but his leaving would not be the deathnell of
> Sirius that everyone says it will. XM did just fine, on a sub basis,
> without him before Sirius acquired him. I do think that Howard should
> be provided with a nice pay package and also should have his own
> TV show on Direct TV. Its only a matter of time until Direct TV makes
> an offer to Sirius in my opinion.
During the 3rd quarter conference or maybe on MSNBC...I got the impression that some contracts were renogotiated such as Oprahs...does anyone know? Oprah Radio did cut most of their on air personalites about a month ago. Now, its only about 3 hosts and a lot of her tv re-runs....where before there were many hosts...probably about 8 or so different hosts in the past. I think the long history betwen Mel Karmazin and Howard Stern will keep him on SIRIUS XM as long as he wants to do radio. Then he may still have his channels for old shows or produce new shows with some of his crew, where he wouldnt have to be on air as much. For example Howard 101 shows all day..
On Nov 09 04:07 PM Pell wrote:
> "Its only a matter of time until Direct TV makes an offer to Sirius
> in my opinion."
>
> I am pleased to quote you Between the hedges.
>
> But I have to say I am seeing comments concerning "dilution of shares"
> and your comment, but when I said it all I got was thumbs down. hmmmmm
>
>
> No comment.
>
> Srir Long
On Nov 09 04:38 PM Jerrold Williams wrote:
> I must give Howard Stern credit as one of the few High paid personalities
> that seems to want the company to do well. I don't know his contract
> but he seems to push SIRIUS XM at all his public appearances. Even
> on his show he does things that he feels will help build subscribers.
> Such as helping to get ROSIE Radio started. He appears to be SIRIUS
> XM spokesperson. Unlike Oprah, and others who seem to act like they
> don't even know what SIRIUS XM is outside of their infrequent appearances
> on their channel. Maybe that will change wth new advertising campaing.
>
> During the 3rd quarter conference or maybe on MSNBC...I got the impression
> that some contracts were renogotiated such as Oprahs...does anyone
> know? Oprah Radio did cut most of their on air personalites about
> a month ago. Now, its only about 3 hosts and a lot of her tv re-runs....where
> before there were many hosts...probably about 8 or so different hosts
> in the past. I think the long history betwen Mel Karmazin and
> Howard Stern will keep him on SIRIUS XM as long as he wants to do
> radio. Then he may still have his channels for old shows or produce
> new shows with some of his crew, where he wouldnt have to be on air
> as much. For example Howard 101 shows all day..
However the share price will be bought at a premium but not as much as one may think considering the poison pill. Yes of course and I am not complaining; management will make out better than just ordinary shareholders.
This is a match made in heaven especially now that Liberty's own house is getting in order and revenues are turning for them.
Make no mistake this will happen and I am glad as a shareholder and glad that this will finally give me one more reason to dump Comcast.
On Nov 09 05:06 PM connorport wrote:
> They can't make an offer for the company until 2011. The poison pill
> will prevent a hostile takeover. Preventative measures were installed
> in the agreements to prevent anyone from getting SIRI for pennies
> on the chopping block. Let management do their thing and we shall
> see recovery in our share value no doubt.