Status Report: XM Satellite Radio, Sirius 143 comments
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Regarding XM Satellite Radio (XMSR) and Sirius Satellite Radio (SIRI):
Once again, despite the various and seemingly countless perspectives on recent activity involving the FCC, there is quite literally no substantial developments to report. Commissioner Martin's comments suggesting a decision before the end of June are nearly identical to the rhetoric Mr. Martin has offered since late last year, and should in now way be taken at face value. While a June decision would be in no way surprising, it would be equally un-shocking if the FCC review continued into July, or even August. What seems to be widely overlooked here is that the FCC very likely would have concluded its review several weeks ago if the DOJ had imposed conditions as part of its approval. As this obviously did not occur, the FCC is essentially on its own in reaching what will be a monumental decision. In other words, there is simply no reason to expect Commissioner Martin's latest vague projection to come to fruition.
There has been some renewed effort by intervenors (the C3SR in particular) to encourage the FCC to hold public hearing as part of the FCC license review. At this late stage of the FCC review, a public hearing seems extremely unlikely, although this is very clearly a situation in which such an event would be extremely helpful to all interested parties, and the public in general. If the FCC were to hold a public hearing, as it did in the latter stages of the GMH-DISH transaction ( the hearing designation in that case was made just more than ten months into the FCC review), the decision for this review would naturally be pushed back well into the summer of this year.
However, there is currently no indication that the FCC in inclined to designate this case for public hearing and it is presumed that no such inclination will occur this late into the review process.
Regardless of the continued hype surrounding the FCC review in this deal, the bottom line has been evident since the DOJ decision in March. The FCC decision will come down to the quantity and severity of conditions at the end of the day. As discussed previously, the issues of spectrum divestiture and interoperable devices -- which were in turn highlighted in reports last year -- are considered by this publication to be the primary concern for the successful completion of this transaction.
If the FCC demands concessions in both areas, there continues to exist a fairly high chance that the deal will be terminated -- as suggested by Mel Karmazin in recent comments. It must be presumed that the FCC and companies are currently engaged in advanced discussions involving concession demands/limits, and that the continuation of intervenor participation is a necessary part of these discussions, at least from the perspective of opponents.
A final FCC decision will only be made within the next month if the companies are willing to accept what are likely to be major concessions or if the companies are somehow able to exert more influence on the review process than the immense third-party influence that has evolved. While this publication continues to anticipate FCC approval in light of DOJ approval, the chances of unconditional (or only on conditions proposed by the companies) approval appear to exceedingly small, if not non-existent.
In terms of odds, the current assessment is a 70% chance of conditional approval accepted by the companies; a 25% chance of conditional approval not accepted by the companies; and a +/-5% chance of the FCC declining the license transfer outright. The final FCC decision is currently expected before the end of June, but again, this is highly tenuous under the circumstances.
Disclosure: We have no positions of any kind, in any security. We are a completely neutral source of research and analysis.
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This article has 143 comments:
Do you know who C3SR is? I have a hunch you know who they are better than your willing to admit. How dare you even cite them in your reporting. Just because they manage to get their communications published on the FCC site doesn't mean they deserve serious consideration for their, "Late In The Game" requests.
Have you looked into their funding and mission statement, or do you just assume that they are a valid concern, that we should all pay attention to? Please... Do you guys do anything over there at M & A that even remotely resembles research?
As I understand C3SR, as reported by a legitimate and unbiased researcher, Tyler Savery from "SiriusBuzz", C3SR claims a mission that says " they are a satellite radio consumer advocacy and watch group" that thinks it's OK to have the FCC not only deny the license of these companies, Sirius and XM, but because they have not complied with interoperability requirements, pull their existing licenses. Now that's what I call a real "Consumer Friendly" agenda.
As a consumer, subscriber, and investor, I publicly denounce C3SR's actions and claims that they represent me in any way, shape, or format. If they further claim to represent my interests as a consumer, or subscriber, I might have to find a lawyer , like the one GTP's use to file a class action lawsuit against them. They not only do not represent my interest, but I am sure that they are misrepresenting their own intentions. Be fore-warned C3SR...and consider yourself notified of my intent. I'm sick of all the BS from idiots that are claiming to represent my and consumers interests. i am also sick of folks like yourself that give them relevance without doing any research. You are all costing the companies seeking this merger and investors and consumers who want this merger and technology, that they are willing to pay for, a major inconvenience and a loss of tremendous wealth.
Any Lawyers out there that want the case......
I wonder who really funds and supports C3SR's efforts. Calling for a Public Hearing Indeed... Try to call C3SR, try to get them to return any communication at all, Try and Find ONE REPORT or SURVEY that they have conducted to find out what their constituency, us consumers, really want and need from this deal. Now that would be RESEARCH. Now if the FCC follows their demands I'll have no satellite service at all... I'm just so glad the we as subscribers, and by the way consumers, we have folks like C3SR watching out for our well being. Just like your insightful research.
I once again feel, I have to say this. To all that want to blame K. Martin why dont you look into who is really holding the merger up. What are you going to say, if the vote comes down to a 3 to 2 vote with the 2 democrats being against. If you want to do some good I would suggest that you write the ones that are against it and not the ones that are for it. It just seems to be the intelligent thing to do. Here would be a good one to Adelstein. Tell him it is not his job to look into why the DOJ approved the merger without concessions, like he said, he thinks it is his responsibility to do.
A quote from their Press Release from Chriss Reale "Hopefully, when, and if, Sirius and XM announce a merger agreement and pursue regulatory approvals, we will have enough support and momentum to ensure that existing subscribers don't get the shaft". At the time of release Reale, was an experienced Washington, DC advocate and second year law student at GWU.
I just wonder what happened to their momentum and who is behind their new found religion.
help on answering the ARPU question between the two companies. I have the company required reporting information and the data for ARPU is a "black box" computation that they are not providing all the detail to. ARPU is not a GAAP metric, its a company / industry operating measure that truly does not tell the whole story.
Thanks for the reference to Tyler's SiriusBuzz article. He has a link to the FCC document from C3SR that provides the survey conducted by NGR, the Canadian Based Research firm utilized to conduct the meaningless survey as it is. No conclusions, no meaningful data as it relates to the merger, or maybe anything else.
The more I look into the facts, the more disgusted I get with the Opposition's argument to this merger. They stand behind false intentions about giving a damn about consumers, competition, and the public interest. The fact of the matter is the Opposition to this merger, is the competition. They have their own self interest and profits in mind not consumers or the publics interest.
I do in fact believe that this merger will go through but not until all the posturing by the self interested parties have been given their due and the light of day can be shone on all of their arguments. In this way a judicial or legislative overturn will not be possible....
Dear Mr. Kevin Martin,
I understand it is your responsibility as Chairman of the FCC to make sound decisions, and at times it takes longer than what many would hope for. However, here's where I believe the problem and issue is in concerning this merger. First, this is a pay-for-subscription service. Not one person in the U.S. is forced into buying it whatsoever. As an example, the reality is that like cable television, satellite radio companies (current and future ones) will have the opportunity to continue business, or start a new business (capitalism at work). Do smaller cable companies like Cox/MediaCom just simply give up and shut down because Comcast has more customers. No. This is a pay service. Plain and simple. The FCC belongs in the public stations (i.e. AM/FM radio, regional television). I am only left to wonder who's interests are best being served here. It is certainly not the customer. As many would vouch for, I firmly believe that it's in someones back pocket with pull and clout. Can you honestly disagree with this statement? I am very much interested in a response to this question. As an American taxpayer, I find this process disgusting and downright immoral. I highly anticipate a class action suit if this merger is not approved. Thank you for reading this and I do hope to hear from you. Thank you.
Kevin O. .....The letter should be sent to all of the members, but more importantly to the Democratic members...Good luck in receiveing a response from anyone. My emails were acknowledged as recieved, but no response.
C3SR survey by NGR occurred when C3SR claimed to represent satellite subscribers. Total subscribers surveyed were 429...that's 429.. when the companies in total had about 15 million subscribers. This is what I mean by showing the light of day on these opponents of the merger and self proclaimed advocates for all of us consumers and subscribers and their noble cause to protect competition.
But referencing C3SR without disclosing who funds C3SR demonstrates either pathetically lazy research or intentional omission of pertinent facts.
Quoting M&A from March 14, 2008:
"This will possibly be the final detailed analytical entry for this transaction. " Since saying that, this article marks the 4th time M&A has woken us up to give us another sleeping pill.
read this interested article... www.orbitcast.com/arch...
Smarty Pants...I love the analogy. Thanks for the chuckle.
My concern at this point is not if the merger will go through or not, but how the stock/company's are going to rebound from the FCC/NAB's delay tactics that almost obliterated these company's overall value.
Will there be a 3 for 1 reverse stock split?
Will Sirius finally announce a major partnership with Apple or Google?
Will they finally switch their business model and stop being so damn dependent on both retail & car sales? Don't you think it's time that their partnership apartment starts tot hink out of the box and contact every web company on the net that has over 50,000 + members to try and integrate their services within their online portals to maximize their exposure and increase revenue?
What about finally opening the flood gates for advertisers to market on their suite of channels?
I know Mel & crew have been very hush, hush, so they don't say the wrong thing to piss off the FCC, but it's going to take an act of god or Apple type of creative innovation to save this company!
They've come to far and fought to far to fail......
Anyways, we've all been stressing out way to much over this marriage, so go to letsgodeep.com on June 5th to participate in our 2nd Home run Derby game for Major League baseball this season ;) It's free to play and I promise it's going to be lots of fun!
Martin is proving himself to be the political and cunning animal that he is. The Democrats are coming into power and he is positioning himself for his next life. He has been staying as non invested in this decision as possible while getting the concessions that he has wanted all along, not just from satellite, but from the cable. I'd be more nervous at the future of cable deals than satellite. I believe the other republican commissioners are also not motivated to take a strong stand in support. Having said that, I still believe Martin has too much of an ego not to put his signature on this deal before leaving the FCC. This is all a lot of drama before the approval that he is publicly advertising as precedent setting regulatory "hard work" and "meaningful deliberation", while looking out for the "consumer's best interest" and serving his conservative constituency regarding "family friendly" programming. So take that STERN, is his and the member's message. This is his last "Hoo-rah" before he goes on vacation and then on to his next life.
By the way I just bought another 12,000 sh of SIRI between 2.52 and 2.58, Monday and Tuesday. I couldn't wait any longer with all this public discussion by Martin.
As far as DSX and my play with NAT I have no doubt that they will rebound and as you said, my recent dividend deposits put a smile on my face while I wait. SEE I DID Listen even though I thought you were wrong with SIRI at $2.50-$2,51. It's an interesting game and I enjoy playing....Sometimes my "greed" steers me wrong.
killerkaul.....I love your enthusiasm for this stock. Folks like yourself deserve the rewards of being committed through this company's hard times. I still feel, even though we're not getting any support from the FCC or any other meaningful government representative, that this is still a wise investment. Run Blue Dog Run!....is a flag I can rally behind.
BTW another strange development. Has anyone noticed the sharp increase in advertising for both siri and xm? I'm seeing commercials almost every day now. So much for keeping things quite. I think we have a deal.
163888....I ass-umed (ha ha) that Martin would go on vacation in July, not realizing that he was going to Asia mid June for a job interview, I mean vacation. I don't know what to think other than the announcement should come before he leaves and after the mid June FCC meeting. Wouldn't that be nice.
P.S. Also of note is the AOL deal with CBS today (and subequent cancellation of XMSR + AOL deal) - pushed down XMSR. I speculate this was a FCC concession for big terrestrial radio brining us closer to a deal. We'll see. Take care.
I was watching a show on space travel. One of the reasons why we do not have faster space ships to travel to Mars is because we have entered into stupid and now unessecessary treaties that prevent deploying nuclear reactors in space. Obviously, nuclear propelled space ships would be faster. Why does government have to get in the way of technological progress?
fjallfoss.fcc.gov/prod...
Any ideas what this means?
FYI, just so you know the 2.25 target was from Goldman Sacs, and the 7 billion was from Citi group. These two bank analyst have been at total opposites from one another. Plus that 7 billion is in 7 or 8 years.
www.bloggingstocks.com.../
P.S. Mr. Martin is a liar (suprised?).
Take care.
NVS
C3SR, "a group of subscribers" (Law students funded by NAB: my comment), who oppose the merger, to the FCC. This, in the honorable Senator's opinion, a Republican no less, is because the redacted letter from this "non biased" (my comment) group of concerned subscribers, all maybe 2 of them, "HINTS" that receivers from Sirius and XM are non compliant with FCC requirements that they be interoperable (a completely false accusation).
Both companies together have perfected the interoperable chipsets for radios that no company, without subsidy, wants to manufacture.
Excuse me I digress.... Martin uses this weak inquiry to say that it may extend his time line, June 30th, for a decision, but he, Martin, is still hopeful.
Hence a drop in stock price on heavy volume from investors who are sick and tired of this BS. 30Mil shares to $2.45. Oh how I wish I had waited. Now I will wait until this stock goes to $2.30-$2.35 before buying any more. What a sad and criminal travesty this has all become.....Martin and now Sen. Brownback have given the NAB, the wolf in C3SR clothing, more power to hold this deal up. Goldie Lox and her BLUE DOG better be careful...RUN BLUE DOG RUN!!!!!......
<Begin Rant>
Mr. Martin is the only one misleading anyone.
I am absolutly dumbfounded at the level of dishonesty in the FCC and
our other elected officials. Mr. Martin came on CNBC las week and
clearly stated that the merger would be decided on soon. Maybe it is
out of his hands, but having a republican senator come out this late
in the game (Sen. Sam Brownback) with more crap just stinks of special
interest and some kind of insider action. Tell the people that the
deal is going through, short the stock, then get one of your buddies
to file yet another "protest letter". Frankly, I'm just sick of it.
At this point, I don't know if there is any point waiting for the FCC,
I think both companies should form a strategic partnership, cancel the
merger, and create a channel on government corruption where all of
these jerks are featured daily. Back to Martin... in my eyes his
political carreer is over after this "waterboy" appointment. He has
lied to the public on national television and will never be able to
garner public trust. If I am misinformed, please correct me, but I
have never seen such unbridaled corruption as the NAB coersion of our
public officials (except maybe oil). I can't wait to get my vote and
get these crooks out of office.
P.S. Notice the ClearChannel Merger is clearing the fences witout
question.
NVS
<End Rant>
As for the 2.45, under normal conditions I would have been happy to say that I got the 2000 again. I now think I made a mistake in not waiting for the at least 2.41, NotVerySmart talked about. I really dont want to get sucked in anymore at 2.30 to 2.35.
P.S. I made a mistake in my June 11th post at 9:46 AM. I got Tate and Cobb mixed up.
Links:
www.orbitcast.com/arch...
www.cnbc.com/id/251074...
If this is true I owe Mr. Martin an apppology. Lets see.
163888...are you willing to admit yet that Martin is part of the problem? You're fooling yourself if you think the 2 dems are the only ones to blame.
In addition to lying repeatedly to the public about his timeframe, he has at a minimum enabled this debacle by failing to put an end to it...by letting this drag on he continues to allow new distractions and alleged "issues" to delay the process even further. He has completely failed to advocate for the consumer. Clearly he lied about not waiting on the DOJ for the FCC to do their own work. There is no possible way the FCC spent time reviewing this merger prior to DOJ and then needed 3-4 months MORE than the DOJ to complete their review. The antitrust issues were the heavy lifting in this deal...the FCC's share of the work should have been minor by comparison. This whole thing is a disgrace.
As far as your support for Martin goes...Republicans support Republicans its who we are. Martin is the one with the problem with conviction and a lack of integrity on this one. I guess it comes down to, not how republican Martin has been, but how Republican he plans on being in the future.. He's showing himself as being more of a Sen. Snow, ME republican, as this President's term is coming to an end.
All I want now is a decision. At an average share price of $2.75, I'm not concerned about Sirius going it alone and with a small increase in subscription price post decision that is long overdue, positive cash flow is just around the corner. (I took my losses on this stock in 2007, my average cost / share was $3.75). Playing the channel has allowed me to increase shares and am now waiting to make some money.
I have regretted the day I voted in this group of self serving republicans, coming to power on Daddy's back in 2000 and on Clinton's adultery, but, look at the alternative...Kerry? Gore? He didn't even win his home State. How ironic it is that he needed to win Florida, with Jed there efficiently leading the charge for his brother, to get elected. How much BS was that?
I'm a lonely republican in Massachusetts with J. Kerry as a Senator. You never hear from him at all, on any major issue without Teddy K. speaking first.
Today Conviction in Politics is much closer to a Convicted Politician than a free and free thinking Politician. This deal is just a more public display of that concept than most others that are happening behind close doors.
killerkaul.... I haven't read the article, but as you can tell I really don't much care what Martin has to say....sorry 'bout that.
This median, blogging, provides vital sentiment about these stocks in an otherwise meaningless bogg of BS. The debate goes on........
cos1000, Dont you remember from my June 7th, 5:08 PM post I sold at 2.51 for 2.64 when I heard Martin was leaving town. Then in the June 12th 3;10 AM post, I said I bought back in at 2.45. I know it is only a few cents, but when fooling around, trading in this channel it helps. Also dam DSX, NM, and DRYS, remember what I said about NM, if it gos to 11 it will go to 9. Once again I wish I sold it all at 13.40 and 14.5. I should have listened to my own advise about greed. Who would have thought the botton would have fallen out of the dry bulk index at this time of the year. I think the 1000 point drop was that report that China wants the port stock piles of iron ore reduced. I believe (IMO) that made people think WOW china must have to much, that they have no place to store it, but really they have to much ore in their ports because the rail system in the middle of the country is destroyed from the earth quake and they just cant move it. So the stock piles in position already is being used up and needs to be replaced.
oregonduck, you are most likely going to want to kill me, but my average cost is nothing. I bought both just before they started to get subscribers on my little brothers advise XMSR anyway (SIRI was my own doing). At first with XMSR it was a mistake I had bought shares at 14 all the way down to 3.10. I kept them until it hit 20 and sold 75 % of them by the time they hit 40. SIRI is the same story almost. The problem is I started to buy back to soon XMSR at 20, 15, 13.5, 12, and 10.5, SIRI at 4, 3.5, 3, and amazing enough 2.5. So the moral of the story is dont be to greedy, I now own 1/3 of what I started with of XMSR and twice as much in SIRI and I still had enough to daytrade in these stocks, with no risk. The only thing I can say is hold on brother, merger or no, one or both in the long run will make up on a cost of money base, plus much more. Unless you see these take off for no real reason (like Stern, or Mel just coming to SIRI) keep them, but if SIRI gos from 1.6 to 5 again in a matter of weeks sell like the wind and if it gos from 5 to 8 in days sell the rest. You and most others know there is no way anything should go up that far and that fast for any reason.
killerkaul, I did not read it, but as far as I am concerned you are never out of line buddy. As a matter of fact, from what I saw from what NotVerySmart says about those boards they are almost worthless as far as meaningful debate. As I have said I hope those clowns dont come over here.
I really wish I could get back in to DSX, NM, and NAT now after their pullback, but I'm restrained by SIRI, again. DSX and NM made a nice move on Friday also. At this point I'm into SIRI for the long haul with no regrets. This thing will all be worked out one way or the other by Mid July or sooner.
Meanwhile I'm heading to Cape Cod to chill for a couple of days and hook up with some friends from NC who are up for the Summer.
Killerkaul, have you won sence you played? If not what was your best place?
I think it is easy to see that with what Martin has as concessions, shows just how, for this merger he is.
I bet "Notverysmart", is kicking himself for being to quick on the trigger. I had welcomed him back to the "Volatility".
Off to breakfast, on this foggy mourning from the Cape.
The reason it is not moving now IMO, is there are a hell of alot of channel traders that are selling the shares the got at 2.6 and below at these prices keeping it down. I personally am keeping my channel shares until at least 3. I believe SIRI will move up slowly until they clear out. and we get to the next bunch which are people that have been in so long that they just want out. They will come in top play at 3.5 and 3.6 range, That is IMO.
As for grammer, you know I am the last one to criticize you or anyone about that.
As for the arguement part, I have never had a problem with that. I love to do it. Logic and debate were two of my favorites in school/ collage.
You provide some valuable and alternative insight for me. I'm a relative novice to this legalized gambling they call the "stock market".
Quick question for whoever feels like answering: What do you mean when you say "channel trader"?
ps. 163888 - You hit the psychological nail on the head with your comment: "THE MERGER WILL HAPPEN ANYTIME NOW I AM NOT GETTING OUT AND HAVE IT PASS, THEN MISS OUT."
If you like this site go to a Tyler Savery article on Seeking Alpha and at the left hand top corner of the page second line under his picture hit that. That will take you to Sirius Buzz. There you will find all you need to know or want to know about SIRI.
I thought it would've popped a bit more today too. Oh well. Time to sit on it and wait it out at this point. Hopefully unload between now and the end of the year somewhere between $4-5.
How can i short a stock? I hear about it all the time, I kinda understand the concept, I see the feature in my trading account, but I have know idea how to actually execute such a trade...??? Apologies in advance for being a noob :o)
By the way for the record (for Dave) I just sold the DSX I got at 29.25 for 34.25 check post June 15th, 5:44 AM. HE,HE,HE,HE, I told you so.
Dave finally repost, not hard to take it apart. He had the gull to take subscriber numbers from 2005 when Stern got them 1 million in a quarter as a reference point for growth. If he was smart he would have gone to Sirius Buzz and got the figures of adds for each quarter, from start to now. But he thinks Tyler does not have good information, what can you say you try to help some people and they just dont want it. Ether that or he thinks I am that dumb enough not to know about the "STERN EFFECT", or maybe he didn't.
Food for thought: could it be possible that K-Mart (shorthand for Kevin Martin as Jim Cramer calls him) knows that he won't get the necessary votes and he's simply going to through the motions to make it look like he's being sincere and making an honest effort? Knowing full well that the deal is going to be denied, so he can save face with the Bush Administration and other politicians and still "appear" pro-consumer, honest and competent?
Look at my June 16th 3:11 PM for my opinion on that one.
Your advice and experience are invaluable to me - much appreciated!
I would not worry about it. This stock has so much potential it amazes me more people dont see it. I dont like to say it to much for fear of somebody seeing it and using it as a reason not to approve of this merger. Just think a Clear Channel took how many years to build its radio bussiness. If this merger gos through SIRI will in one fail swoop, will have what double, triple (dont know how many stations they control exactly) the stations as Clear Channel has. I also did not want to say that is why I knew just recently George Town Partners would not go through. That would wipe out the FCC rule that Satellite radio had to be subsribtion based companies only. Think about it every channel is really a station all on its own. Believe me that is one reason Mel came to SIRI and wants this merger. He will control the biggest media empire out, when it comes to radio, He is no dummy.
got to go wife is calling, talk to you later.
As for banking stocks I lost my ass on DFR (I really should not say I lost, because I still hold them but you know what I mean). So I dont know if I would give anybody advice on that sector.
I will say, PVX is a nice stable high dividend stock (pays 12 %), for at least the next two years anyway (it has to do with Canada changing its tax policy towards trusts, being how much assets it can have outside Canada and so on and so on). Also right now is not the best time to get in (11.89), what til it gets to around 10.5,or just below 11 then get in. It should get there in a few months after it gos to around 13 hopefully.