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With Sirius (SIRI) and XM (XMSR) at long term lows, the natural question is, “where is the bottom?”

The answer to that question can take many forms, but something we need to consider is how it is that we got to where we are now.

  1. The merger process has taken quite a long time, and the uncertainty associated with the long wait has caused the equities to suffer, and the confidence of investors to erode.
  2. The Wienkes analysis (Goldman Sachs) set a low target for Sirius and XM, and the street reacted by selling off in a substantial manner.

Wienkes carries a “Convicted Sell” on Sirius, the lowest rating offered by the firm. When Wienkes issued his note, he set a $1.00 price target on Sirius as a stand-alone company, and a $1.75 target as a merged company.

Most seem to feel that the merger will pass through the FCC process, so what we are dealing with is the $1.75 price target. Sirius is very close to that target right now. So close, in fact, that we should hear from Wienkes soon. The question is what his opinion will be.

If he wants to keep a “Convicted Sell” on Sirius, then he will have to lower his price target. This puts him in a position of establishing a merged company price target that is getting quite close to his stand-alone target. Most people believe that the merger will deliver synergies, and even Wienkes himself sees synergies. This fact, in my opinion, would limit the level to which Wienkes can maintain a “Convicted Sell”. If he were to maintain that rating, any price target under $1.50 would likely begin to be questioned by the street.

Thus, one possible bottom is $1.50 in my opinion.

The other choice that Wienkes has is to “Upgrade” Sirius to a “Sell” rating. Yes, that would actually be an upgrade from Wienkes. He could establish a lower target with such an upgrade, but at that point the “conviction” of his sell rating would lose some of its power.

Whether people believe it or not, it is clear that Wienkes has the ear of the street. Whether his opinion is truly believed, or simply used by the bears to drive the price down can be debated, but at this point that debate is almost immaterial. This is because it seems likely, and perhaps even logical, that these stocks are near their bottoms.

Now, before people run around thinking that the bottom is in, I would offer a few cautions. Until the merger decision is rendered, there is limited movement in these equities no matter what Wienkes' opinion is. Additionally, these equities seem to be trading on emotion. Certainly there is no guidance yet, and until there is guidance, assumptions can and will be made.

Thus, while we may get an answer to the Wienkes saga, there is still a big factor in that a merger decision has not yet been reached.

If we have seen one thing in SDARS, it is that swings are possible with these stocks. Good news tends to drive things higher than they should, and bad news drives the prices lower than they should. Investors are at a point of deciding what speculation and assumptions to follow, and goals need to be established for short or long term. Investors' strategies need to consider both aspects. There are investors who are in for a long term, and investors that are playing the merger on a short term basis.

What to do???

Watch the sector closely. Watch the merger process. Watch the volume. Establish your goals, and try to understand the volatility that short term traders (buyers and sellers) will bring to these equities.

At this point try to consider WWWD (What Will Wienkes Do) and WWFCCD (What Will The FCC Do).

Position - Long Sirius, Long XM

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This article has 143 comments:

  •  
    Hold on people - this is going to hit the roof at $7 a share - SOON !
    Good things come to those who wait !!!!!!!!!!!
    2008 Jun 25 04:32 AM | Link | Reply
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    Thanks again Tyler for your article. I've been investing for quite some time now and this stock has been the most extreme "wild card" that I've ever been involved in. I'm usually a conservative investor, more of a swing trader... but I'm long and heavy in SIRI and plan to hang in there. My average PPS is higher than I would like it to be but I firmly believe that the merged companies will survive and actually prosper well over time. I've been following your articles and even though I know that you are not an "analyst", your opinions prove to be more on track than most analysts that have posted their ratings on SIRI. Thanks again, keep up the good work.... greatly appreciated by all of us "longs".
    2008 Jun 25 06:39 AM | Link | Reply
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    The Wienkes analysis (Goldman Sachs) has to much play on this stock I would like to know who made this guy GOD. there are many other analysis who have a different view on the stock and dont get the play like him. As they say " you got to be in it to win it" I rather listen to Jim Cramer than Wienkes any day of the weak. $5.00 on the pop when FCC aproves the merger. Looking for stock to go up this morning it was up 8 cents in extended trading last night
    2008 Jun 25 07:52 AM | Link | Reply
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    USER 168, IF YOU GO BACK AND LOOK AT CRAMERS HISTORICAL STOCK PICKS, YOUD REALIZE THAT HE IS WRONG OFTENTIMES..MANY OF HIS STOCK PICKS HAVE PLUMMETED AND HE CONVENIENTLY DOESNT MAKE MENTION OF THEM THE VAST MAJORITY OF THE TIME..HE KEPT SCREAMING SIRI $5 WHEREAS IF YOU WOULD HAVE LOOKED AT THE OPEN INTEREST FOR JANUARY, THERE WERE MASSIVE AMOUNTS OF CALLS OPEN INTEREST WHICH IS A CONTRARIAN INDICATOR..TOO MUCH BULLISHNESS AND THE STOCK SUBSEQUENTLY CRATER..TYLER NEVER MADE MENTION OF THIS AS A WRITER, HE SHOULD HAVE 'LAID BARE ALL OF THE FACTS'..PROFESSIONAL MONEY MANAGERS SUCH AS VINCE FARRELL ADVOCATED WAITING ON THE STOCKS AS RECENTLY AS MONTHS AGO AND HE WAS RIGHT..IN THE CASE OF WRONG VERSUS RIGHT, TYLER SIMPLY LEAD US ASTRAY IN TERMS OF THE DIRECTION OF THESE STOCKS..40% IS UNACCEPTABLE..I WOULD HAVE RATHER LEFT IT IN THE DAMNED BANK..GIME THAT 3%..IF WE ALL GO DOWN 50% IT WOULD TAKE A DOULBLEEEEEEEEEEEEE TO RECOUP OUR INITIAL INVESTMENT..THIS GAME IS RIGGED
    2008 Jun 25 08:01 AM | Link | Reply
  •  
    I would'nt touch those stocks right now. Those so-called analysts, have ruined what was once a great investment possibility. It's amazing how these idiots can move the market the way they do, and the bigger idiot's are all the people who always listen to them. Unfortunately, that's how the game is played.
    2008 Jun 25 08:14 AM | Link | Reply
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    USER 178, YOURE RIGHT I SHOULD HAVE KNOWN BETTER THAN TO INVEST IN THESE DOGS IRRESPECTIVE OF FRAUDULENT BULLISH BROKERAGE REPORTS AND IRRESPONSIBLE WRITERS
    2008 Jun 25 08:17 AM | Link | Reply
  •  
    User202507... did you sell? or are you along for the ride?
    2008 Jun 25 09:10 AM | Link | Reply
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    omagod, im begrudgingly holding..there were so many better opportunity cost stocks..look at few months back....mrvl and xm were same price...brcm...micron.... i had to go against my gut and buy these garbage stocks...everyone on this board is down...people should not be defensive and account for their misplaced ballyhood bullishness..and tyler DOMNT YOU DARE tell me again that you only have 10%, because you are insulting your readers who have their monies at stake and value their investments a lot more than your callous 10% self..YOU KNOW DAMN WELL YOU SHOULD TAKE COWENS AND CITIS REPORTS WITH A GRAIN OF SALT
    2008 Jun 25 09:16 AM | Link | Reply
  •  
    I'm pretty sure Tyler knows me from SIRI message board from 2004 and he will confirm my SIRI bearishness since the high 7's and he will have to admit 'me right, he wrong".
    Today the combined SIRI/XMSR has mkt cap --even at these PPS--of $5.28 BILLION. This is an astronomical # for a combined co that has (as of 12/31/07--figures now are about the same, I'm too lazy to do the arithmetic for 3/31/08) ttm bottom line loss ($1.247 BILLION), deficit net worth ($1.777 BILLION), long term debt $2.760 BIILION, cash in bank $596MILLION and wasting fast, and upon merger will have over 2.9 BILLION shares over which any profits (when and how?) will have to be spread.

    Just some other thoughts: when Mel said SIRI 4Q06 and 4Q07 were cash flow positive, that was a scam---accts payable zoomed both times and next quarters adjusted bigtime.
    Then a gigantic challenge to refinance over $1B LTD in this credit mkt fot an entity with these pitiful metrics.
    Then too growth in total subs is a decreasing percent---1Q06 for SIRI was +761K, 1Q07 was +557K, recent 1Q08 was +323K.
    Churn is every quarter worse--in1Q06 SIRI needed 1.26 gross sub adds to get one net new sub. In 1Q08 the figure was 3.11 gross adds needed for one net add.

    THESE NUMBERS DO NOT SUPPORT $5.28 BILLION market valuation. Add in the LTD and enterprise value is about $8 BILLION. This is ridiculous!!! SATRAD is not EVER getting to critical mass!
    I not only support the GS price targets but would forecast bankruptcy for both companies as standalones, maybe $1.00 --$2.00 trading range for a few years if merger goes ahead.
    2008 Jun 25 09:19 AM | Link | Reply
  •  
    It is strange that the previous posts from User this and User that, all seem to have simular sentiment. Hum, could they possibly be the same negative person or Goldman Sachs co-workers? User numbers, no identity. I think they or he is related to Stinky Winky. It is amazing that people who cry irresponsibilties take the time to read irresponsible writing and post about it. Now, thank you Tyler for the best information on this mess I have seen, both good and bad. I agree with you explination of the bottom and I'm ready to average down. I do believe Twins is a bit optomistic with $7.00. Would $4.00-$5.00 be asking too much??
    2008 Jun 25 09:26 AM | Link | Reply
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    One more thing. Those of you buying XM for the 4.6 premium, be careful. I see as the prices are going down the premium gap has decreased from almost $2.00 per siri share to about 25 cents now. I am willing to bet that by the time of the actual merger, 4.6 xm shares will be worth less than 1 siri share.
    2008 Jun 25 09:37 AM | Link | Reply
  •  
    Has anyone checked on the holdings of GS with SIRI and XM. I am positive they are benefiting from there views.
    2008 Jun 25 09:52 AM | Link | Reply
  •  
    tyler you have done me and your readers a disservice!!! YOU SHOULD ONLY WRITE ABOUT EQUITIES IF YOU ARE QUALIFIED!!! YOU PULLED THESE B*S REPORTS FROM CITI & COWEN AND DUPE THE INVESTMENT CROWD TO JUMP IN..LOOK WHERE THESE STOCKS ARE NOW!!! not only did we lose money, but there was an opportunity cost forgone becuase we could have loaded up on other companies such as brcm, mrvl which have almost DOUBLED since a couple of months ago..PLEASE CONCEDE YOU MADE A 'MISTAKE' , TO PUT IT MILDLY
    YOU JUST MAKE EXCUSES AND NOONE ON THIS BOARD IS GOING TO BUY THAT OK
    2008 Jun 25 10:14 AM | Link | Reply
  •  
    Tyler, thank you for presenting your "OPINION" and "CAUTIONS" here for all of us Investors to evaluate along with all the other possible information out there, and then make our own investment decisions.

    As far as picking where this stock will go after the merger announcement, what the day of, the week of, or two weeks out, strap on your seat belts because its going to be a "whip lash of a ride". I don't understand how anyone can anticipate the relief to investors who just want to get out breaking even, and all the day traders who will be buying and selling this stock trying to make a buck. With the merger 3 - 4 weeks out, and after the company resells itself to the investment community, with "CONSERVATIVE" company guidance, this stock will move to a 3.50 - 4.0 trading range. This range could easily go to 4.0-4.5 if the refinancing is settled out during the "reselling" to the investment community blitz. 3rd Quarter results, regardless what they are, will probably disappoint and over exuberant investor base and cause a pull back. Its the fourth quarter that I believe this stock starts to move solidly forward, with analysts breaking out all of their best guesses, manipulating new metrics, and touting the wonderful job Mel and the boys are doing in moving the company forward. End of the year could easily be in the 4.75-5.00, breaking 5.0, and then easily going to 6-6.50 when all the big investment folks can buy in to this company with their mutual funds. Just this investors foolish opinion.
    2008 Jun 25 10:28 AM | Link | Reply
  •  
    User 202507, blaming others for your own stock buying decisions is childish at worst and futile at best. By your very logic, you're just as naive for trusting Tyler as 'Tyler was for trusting Citi'. Also, using Caps Lock doesn't give your ramblings more credence.
    2008 Jun 25 10:33 AM | Link | Reply
  •  
    202507....Speak for yourself PLEASE!!! If you lost money your a fool for selling at this time. Opportunity costs are not real dollars, although should always be considered, and they exist every time you buy any stock. Folks, including myself, have tried to be kind, but you constant complaining is getting boring, and adds nothing to the present situation.
    2008 Jun 25 10:34 AM | Link | Reply
  •  
    MATHMAN YOURE RIGHT, I SHOULD HAVE TRUSTED MYSELF AND NOT TYLER BUT PLEASE DONT BERATE ME FOR BEING UPSET BECUASE YOU TOO ARE DOWN CLOWN
    2008 Jun 25 10:55 AM | Link | Reply
  •  
    COS1000 YOU ARE DOWN TOO YOU IMBECILE..DONT THROW STONES AT GLASS HOUSES
    2008 Jun 25 10:57 AM | Link | Reply
  •  
    202507.....I only lose money when I sell at these ridiculously low prices. Your name calling supports your ignorance.
    2008 Jun 25 11:01 AM | Link | Reply
  •  
    YOU ARE BEING ABRASIVE COS1000..TREAT OTHERS AS YOU WOULD HAVE OTHERS TREAT YOU,,,WELL THESE 'LOW' PRICES ARE FALLING APART REGRETTABLY AT THE SEAMS..GODDAM,N THIS INVESTMENT
    2008 Jun 25 11:05 AM | Link | Reply
  •  
    I think you are giving Wienkes way too much credit, and airtime, for how the stock is moving. If you overlay $DJI, $SPX , or even RKH on the 60 or even 180 day chart you will see that the stock is just moving with the market. Investors are moving away from all stocks, especially the financials and speculative plays as we move into a recession .
    2008 Jun 25 11:11 AM | Link | Reply
  •  
    202507.....Well this ABRASIVE, IMBECILE's opinion is that this stock is trying to form a short term bottom between 1.85 and 1.90. If it holds here today, I will buy 2K shares tomorrow to improve my long term position. Let's hope that Weinkes keeps his opinions to himself until after the merger decision.
    2008 Jun 25 11:16 AM | Link | Reply
  •  
    Muley101.....Great point....Taking a step back to look at the forest through the tree is always a good idea.
    2008 Jun 25 11:21 AM | Link | Reply
  •  
    I am a FA KING IDIOT
    2008 Jun 25 11:21 AM | Link | Reply
  •  
    202507......Now that we can agree that we are Both less than perfect, we should really try to focus on what's next for this company.
    2008 Jun 25 11:26 AM | Link | Reply
  •  
    Whoo, I am glad a new article was started I was getting sick of waiting for the article to load/come up and then having to scroll down all that way. Thanks Tyler for that.

    Now I get here and I see the message board morons found us again. I was afraid of that. Even though I try not to respond, it ends up being to hard not to.

    BURTBECK, I am sure that everything you where saying then held true, as you "shorted" and got your "PUTs" in the stock all the way from 1 to 9 as you were losing your ass every time you had to cover or your options expired worthless, you said that cant be, it should not happen. All I can say is I sure am glad I did not listen to people like you when I bought DISH, and DTV. I would still be working now. I heard you people back then saying the same shit.

    202507, Hey speak for your self. I like all the information Tyler gives. By the way it is information. I cant count the times he has said I am not an analyst, financial planner, ect., ect., get a grip. My god were else are you going to get somebody going through the FCC comments to break down a percentage on the people FOR, and AGAINST the merger, to track how the NAB scam was effecting the percentages (He also updated it every month). If you dont like it dont read his articles, it is that simple DHAAAAA.

    cos1000 got DSX for 31.4 god dam it should have bought Tue. By the way, I answered your post on the other article. I am also going to be pissed if SIRI does not stay down through at least today.
    2008 Jun 25 11:29 AM | Link | Reply
  •  
    Up ... Down.... who cares short term... What about Cramers statement about insolvency for both companies. Is this his way of getting the FCC commissioners off their collective duffs? If the corps do go south, Is there cause for a class action suite against the FCC for delaying a business interest with approval.
    2008 Jun 25 11:31 AM | Link | Reply
  •  
    ALL COMMENTS ASIDE, THESE DAMNED STOCKS ARE DOWN..LOWER THAN THE MARKET TROUGH IN MARCH..PATHETIC, DAMNED PATHETIC
    2008 Jun 25 11:38 AM | Link | Reply
  •  
    163888.......Read your response over there, LOL. Dave finally admitted for all of his comments, he is not an investor in this sector. He uses DCF to assess his investments, as do these professional analysts, hence the huge swings in estimates for Sirius' future. With no guidance and less than ten years of business model operation DCF is all there is for forecasting and valuation, but like firing a 8 shot shot gun when what's needed is a 22.
    2008 Jun 25 11:47 AM | Link | Reply
  •  
    Whiner...... I read a few earlier posts of yours on the previous site, and I actually thought you might be coming around....... however slowly. I was wrong........sadly, the stink is back.
    2008 Jun 25 11:55 AM | Link | Reply
  •  
    BABABOOOOOOIE, Cramer has always thought that they are running out of cash. He just feels SIRI will have just enough to be FCF positive before they run out. That is the big question do they have enough money to make it. I like many think they will be able to make it. If they do we feel it is a LOOK OUT kind of stock.

    202507 Hold your shit for one more day ok. That is unless you are in the margin then cover it.
    2008 Jun 25 11:56 AM | Link | Reply
  •  
    Cos1000....... Just read your last post... do you and 16388 like to hunt pheasant? A college buddy of mine, east river here in So. Dak. has some great pheasant hunting.
    2008 Jun 25 12:00 PM | Link | Reply
  •  
    cos1000, You remember what I said in my very first comment on the last article about the amount of interest in this stock. What you just said about Dave just confirms it. I have to admit I will never get why anyone that does not invest in these stocks, bother do spend so much time on them. I will tell you what that tells me, that this sector is going to be big. Think about it, it has captured the interest of people that have nothing to do with it.
    2008 Jun 25 12:04 PM | Link | Reply
  •  
    killerkaul, no I dont hunt anymore after my brother was shot by some nut ball, they took with them hunting. Yes that is right he shot him on purpose with a 30/30. Amazing enough he is still alive. He had a hole in his lower back 7" in diameter and is missing 3'-0" of intestine. But is still walking around.
    2008 Jun 25 12:16 PM | Link | Reply
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    Killerkaul......Back in the late 70's, early 80's, I lived in Glendale, AZ and an Air Force buddy and I use to go early morning quail and dove hunting in the desert. Back then Phoenix only had 650K people and you could drive 5 minutes into the desert and walk for hours without seeing anything but a cow (open range), rattle snake, and a few coyote. Now that I'm back east, Massachusetts, I wouldn't be caught in the woods with all the "would be" hunters. Your friends place sounds great, but it has been years since I've hunted. A little fishing, salt and fresh water, and some hiking (off season) fits the bill now days.

    163888....I think your right on the mark that the awareness level, investor or not, is on the rise and will continue. When people start to really understand the "second chance", used car market, and the growing subscriber "fish pond" that it will become, this company will really be able to post solid results. That's when people will look back at weeks like this and celebrate their tenacity or lament their weak fortitude.
    2008 Jun 25 12:31 PM | Link | Reply
  •  
    Someone needs to put together a viral, pro-merger youtube video clip exposing the FCC, political agendas, merits of the merger and undeniable benefits and upside of this stock. Basically take everything we've been talking about for the past year+, including Cramer, FCC, Weinke, Karmazin, blogs, etc. A 5-10 minute clip should suffice - perhaps a "Michael-Moore-let's-e... type production. Watch it catch fire on the Internet, Digg, news portals, myspace, facebook, etc. Public awareness and subsequent pressure on the necessary parties to do the right thing.

    I'm surprised Mel and Co. haven't looked into this. If they don't, someone should...
    2008 Jun 25 12:49 PM | Link | Reply
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    163888.....Sorry about your brother. Yourself and Cos sound like friends I could spend a day or two hunting with. Thanks.
    2008 Jun 25 12:49 PM | Link | Reply
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    I don't know why my comment was truncated with "..."

    It should read: Michael-Moore-let's-ex... type production.
    2008 Jun 25 12:51 PM | Link | Reply
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    Again!? WTF? OK one more try: Michael Moore let's expose the corruption type production
    2008 Jun 25 12:52 PM | Link | Reply
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    163888 - I purchased the stock (dsx)earlier in the day, before your post. I ALWAYS do my own homework. I am a big boy, I make my own decisions. I will listen to or read others opinions, but if it doesnt work out or if it does, it is my own doing.

    I have followed dsx for quite some time. Love the dividend and growth. It is a cheaper DRYS
    2008 Jun 25 12:53 PM | Link | Reply
  •  
    I see this sentence, or something to the same effect often in articles concerning satellite radio:

    "The merger is expected to be approved by the FCC within weeks, and by the end of X at the latest". Since DOJ approval, X has equaled April, May, and June. Now I'd say its at July.

    What is everyones opinion as to the absolute latest that we will see final merger approval (an FCC vote) and the closing of the deal? And I mean your absolute, "i'd bet my families lives on it", no way it wont be done yet date... If you asked me back in March, I would have guessed May (and my family would be no more...). I anticipated some political and beaurocratic crap, but this is ridiculous. I'm no Washington insider, but I thought the Department of Justice's decision would send a message to the NAB lobbyists and the FCC that Uncle Sam was actually in it for the people, and this was about more that corporate titans and politicians wheeling and dealing behind closed doors.

    Am I still naive to think that it will be done by the end of July?
    2008 Jun 25 12:57 PM | Link | Reply
  •  
    Killerkaul....maybe in a couple years we can have a SIRIUS hits 75 mil subscriber reunion, we'll sell 100 shares a piece and pay for the whole thing. Right now that might get us a "bus ticket to nowhere and a Big Mac"
    2008 Jun 25 01:54 PM | Link | Reply
  •  
    Again guys, the movement in SIRI correlates almost exactly to the movement in the market (DOW, S&P, and even XLF - Regional Bank tracking ETF) for the past 60 days. Hang in there, the rewards are coming. Investors will be back on this stock like buzzards on a dead possum after a car passes.
    2008 Jun 25 01:57 PM | Link | Reply
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    muley101.....I can see it Stan, the stock rising and buzzards are circling, We're getting pretty good volume and no strong indication down, 1.86 - 1.92 so far. Run Blue Dog Run!!!!!
    2008 Jun 25 02:08 PM | Link | Reply
  •  
    So Cos, you're saying we should still ride this pony until the ned of the year to have a chance to sniff the $4.00 to $5.00 mark? Ouy Vei.......My break even point is $4.00 and I'm blowing out of this thing. I'll get back in if their business models and partnerships strengthem over 2009, but I can't handle another roller coaster ride from this company again!

    I'll still be amazed if this merger happens before 2009 ;)

    2008 Jun 25 02:11 PM | Link | Reply
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    ......................... I like Big Macs.
    2008 Jun 25 02:26 PM | Link | Reply
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    hey muley...... I like it!
    2008 Jun 25 02:27 PM | Link | Reply
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    jimmydasaint.....yeah and the merge has to happen. The merger vote is in circulation right now for consideration. The vote is results in favor will most likely be known when Martin is back from Asia next week. The June open meeting was canceled, there is no reason the vote shouldn't be done by the July meeting. I check the FCC open meeting schedule today and didn't see the July meeting date posted yet. I'm not say that over the next six months to the end of the year that the stock won't spike above or below my predictions. I just feel that the stock from here with even the merge is going to need six months to rebuild it base on solid performance and good guidance.
    2008 Jun 25 02:28 PM | Link | Reply
  •  
    This stock will pop on the merger and if we break down the price of OIL. Blame the FCC was sitting on this so long they took the wind out of our sails. If the FCC just came out and voted as a group we would be I bet at $4 to $5.00 a share right now. Three simple ways to correct the stock right now FIRST..........approve the merger,
    second............Have sirius reinvest in it's own stock " a buy back",
    Offer a very basic "student package" at $3.99 geared to young adults by broadcasting college radio stations and other music at a deep discount by making it affordable by off set this with advertising. In the mean time Email the FCC and tell them to stop bleeding these stocks and vote on the merger.
    2008 Jun 25 03:23 PM | Link | Reply
  •  
    LET MEL KNOW WERE BLEEDING HERE IS HIS EMAIL ADDRESS karmazinm@siriusradio....
    2008 Jun 25 03:29 PM | Link | Reply
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    omagod500,
    "i'd bet my families lives on it"

    I believe the merger will be approved by the 22nd.

    BTW:
    You've been adopted :)
    2008 Jun 25 03:33 PM | Link | Reply
  •  
    The relevant question isn't "where is the bottom?" The relevant question is "where is the top?"
    2008 Jun 25 03:43 PM | Link | Reply
  •  
    The cult mentality here is breathtaking.

    This author's reports tend to parrot Wall Street research and media reports, with some benign commentary and speculation thrown in for good measure. I'd like to hear some real insight from this self-appointed satellite radio "expert":

    What is this author's upside price target on SIRI? What is his "sell" price?

    At what point does he think SIRI will be overvalued, and what is his basis for coming to that figure?

    I hear the sizzle, but I don't see the steak. If the Goldman analyst is so inaccurate, let's hear the author's rationale and alternative target price, and how he arrives at it. What discount rate does he apply in his DCF analysis?

    If $1.50 is the bottom, then where is the top?

    As they say prior to takeoff, "keep in mind that the nearest emergency exit may be behind you."
    2008 Jun 25 03:48 PM | Link | Reply
  •  
    buckle those setbelts for take off "vicar" it's been a long bumpy ride with cheep fuel at times.
    2008 Jun 25 04:12 PM | Link | Reply
  •  
    pop the cork.............up 7 cents today!!!!
    2008 Jun 25 04:18 PM | Link | Reply
  •  
    Wow...the priced closed up a few cents today. Time for another Democrat politician to grandstand against the merger, another negative story, or a downgrade ordered by the NAB. Reply
    2008 Jun 25 04:45 PM | Link | Reply
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    Vicar what are your thoughts on those questions? How much are you invested in these stocks? I would truly appreciated some more input in setting value to this stock. What's your bottom for this stock but more importantly, what's your top by the end of the year? With all the DCF assumptions, how can you effectively use it to evaluate this company as an investment, especially without company guidance, or knowing if the merger will go through. You might as well throw darts blindfolded. Or, we could spend the rest of our days arguing whose guess for discount rate, cap ex and cash flow, is right on a company without an operating history. Also using DCF, with all of its moving parts (unknown), projecting 2009, 2010, 2011 just gets even more interesting. When its all said and done, no matter how sophisticated DCF, discounted cash flow, method of investing sounds, it doesn't work very well for nascent companies. I will give though there isn't much else at this time which is why this company is getting pulverized by the street. The street nor the company has been able to establish cost synergy savings, what cap expenses will be for satellites, when to launch with date certain, until they essentially know what they will be: 1 satellite radio company, or 2. You sound like the author I came across on a Barron's article. Are You?
    2008 Jun 25 05:25 PM | Link | Reply
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    cos1000, DCF is imperfect. But if not DCF, what tool do you use to value this company? Hunches and giggles? DCF has faults, but it's better than blind guessing, herd mentality, and wishful thinking, which accounts for most of the rhetoric on this board. I don't see enough risk-adjusted upside beyond current levels enough to justify taking a position in this stock. There are simply too many better investment opportunities out there on a risk-adjusted basis for me to bother committing funds to this equity issue.
    2008 Jun 25 05:47 PM | Link | Reply
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    Does anybody think selling at 4.25 too conservative?
    2008 Jun 25 06:01 PM | Link | Reply
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    $4.25 too conservative? Pas moi. To justify that valuation:

    This company would have to grow its subscriber base substantially - 50% per year or more - reduce its churn below 1% - improve its conversion rate to 60% or better, and stave off the third-parties who are already getting in line for a piece of the profits.

    Let's not forget shareholder dilution from stock options and stock-based compensation. Its only growth driver is the auto industry now. Even if they can manage to get the credit to buy a new vehicle, the interest rate will make them think twice about springing for a satellite radio subscription.

    An irrational market could potentially push this stock's price to $4 per share, but even if it gets there (it won't), keep a firm grip on your ripcord.
    2008 Jun 25 06:13 PM | Link | Reply
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    I am pretty sure the merger will be approved the week of June 30th!!!
    2008 Jun 25 06:40 PM | Link | Reply
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    I guess tou can say i'm like alot of other people on this blog, that is to say - sell if the goin gets good just enough to break even or possibly make it worth the wait. Fingers are crossed holdin onto the ripcord!
    2008 Jun 25 06:41 PM | Link | Reply
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    Vicar of Value....or should I say Dave? With this company not turning a profit its hard to apply more conventional investment formulas to this stock. Revenue Growth YOY, driven by Subscriber Growth YOY (retail sucks given pending FCC decision), SAC Subscriber Acquisition Costs (unique to this industry), OEM take rates (as you mentioned above, ARPU average revenue per unit subscribed (more of an operational metric), each OEM's penetration rate for installed autos, Cap EX (the big unknown but is accrued in current financial reports ), Free Cash Flow (actual and projected), Secondary Market / Used Car or unsubscribed but installed auto units (based on take rate), Advertising Revenue (small but growing), which direction the wind is blowing and a few other "Hunches and Giggles"
    2008 Jun 25 06:57 PM | Link | Reply
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    Merger Mania.....good to see your still here and holding I hope??
    2008 Jun 25 07:00 PM | Link | Reply
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    The approval should have been a joyous celebration:

    Instead this board is like a wake---thanks to the following and others not named:

    1. Goldman Sacs and Winkie

    2.. Georgetown Partners and Mr. Jackson

    3. NAB

    4. Other lobbying groups against the merger

    5. Congressman who delayed the process with opinions that belong to the FCC to make and not to Congress as it is only the DOJ and FCC that have a vote on the merger

    6. Hedge funds and short sellers

    7. An FCC that did not take a firm stand from day one by establisihing a deadline for making a final decision and staying with it.
    Just as when Rome burned Nero fiddled---- the FCC bowed to all of the naysayers and oh so politically correct factions as the stock collapsed.

    FWIW forget the chat boards; demand quarterly and annual reports from the companies you invest in and not on the internet and do your own analysis whether it be technical or fundmental.
    Roxieanne






    2008 Jun 25 09:09 PM | Link | Reply
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    Well put roxie
    2008 Jun 25 09:19 PM | Link | Reply
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    Killerkaul, cos1000, I would not mind that but lets make it Vegas baby.


    Q, if you mention Michael M. one more time I am going to puck.


    heynow913, If you recall I mentioned that I thought you already knew about DSX sense you already invested in it I was just trying to make a point to 202507. By the way what to you think about that call we made. Vigar of Value (Dave) would call that luck but for most who follow this board, know I have been making a lot of lucky calls like that, what are the odds of that.


    jimmydasaint, The problem you are going to have is that when The merged company shows what they need to it will be to late. The metrics will have a sweeping change. After 2009 sometime early 2010, I think the stock will take off. Mel has always under estimated and over performed. I believe It is going to be like a light switch. Like I have said, it is not the price of today we are buying it is the price we dont want to pay tomarrow.


    202507, I believe it is because of GS did not get nailed by the sub prime mess like everyone else. So they are now considered to be the Streets golden child. Plus like I have said before the whole market is down.

    cos1000, god dam it I was going down the blog reading and was going to call a duck a duck (Dave) but you beat me to it. As Dave would say that that was just a lucky guess though.

    2008 Jun 25 09:34 PM | Link | Reply
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    novistor.....please understand what Vicar is saying and makes sound impossible for this company to accomplish while saying it. First of all as reported in the company's 10-Q 1st qtr 2008, in the midst of the FCC and the DOJ considering these companies' futures, the grew subscribers 38% year of year (YOY), He says they would need 50% or more to get to 4.0. He also throws churn rate as though 50% didn't already take that into consideration. 50% should be net subscriber growth which means churn is churn whatever the percentage. It's running at about 2.6%. Churn is an operating metric that points to opportunities and goals and possibly potential problems. Sirius and XM have had moderate variations in churn over the last year.

    Also understand that what he is calling conversion rate is known in the industry as "Take Rate", currently running at about 50%, This rate represents of all the autos with factory, OEM, installed radios, the percentage of owners who subscribe beyond the free trial period included in their new car purchase. This "Take Rate" could actually go down, but not likely, if OEM penetration with each auto manufacturer went up significantly, but less owners converted. The thing is, even with this condition, subscriber growth and revenue from paid subscription would most probably go up.

    This is a complex company, that contracts with most manufacturers. Most analysts don't really get into the numbers and folks like Vicar want to overlay the financial industry's formulas for investing in mature companies to assess this new technology / media company.

    Even GS Weinkes used the reduce YOY subscriber growth, for the quarter, and the fact that "Younger People" are not buying SAT RAD in the retail chain as to why SAT RAD is loosing it's shine with consumers to competitive options. No Numbers, supposition. Also to say that SAT RAD is to dependent on the Auto Manufacturing industry for growth, like that is a revelation, is to state the obvious and then "spin it" like that's a bad thing. The auto industry is and will be their market, new cars significantly at first, but the used car market will be even bigger over time. The "Take Rate" of 50% needs to go to 60% in order for these companies to succeed is a naive understanding of what the SAT RAD industry will become. My example in simple numbers would be: 2008 say 12 mil cars with SAT RAD installed, 50% take rate = 6 mil new subscribers, now we also have 6 mil autos that have not had their radios turned on. Each year that happens, and it already is but is not being reported or assigned a meaningful metric to date, the used car market will increase. Now as a used car buyer, there are 6 mil used cars each year that have SAT RAD installed and you won't have to pay extra for the equipment. That means if you subscribe, Sirius' subscription acquisition cost goes to its partner agreement cost (OEM subsidy) and you become a "Second Chance" subscriber for the company. The increase revenue and resulting CASH FLOW on what is now being considered a lost opportunity falls to the bottom line and is not in any analyst number to date.

    So as I, and many here have said before, information and how it is applied is critical. I have not bought a STOCK, I have invested in a COMPANY. For all you stock investors or not, Have a Nice Day. For fellow COMPANY OWNERS tomorrow will be a good day to strengthen your ownership position.
    2008 Jun 25 09:52 PM | Link | Reply
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    163888...Hey I got tell you this shit is exhausting.
    2008 Jun 25 09:58 PM | Link | Reply
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    Roxieanne......couldn'... have said it better.
    2008 Jun 25 10:00 PM | Link | Reply
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    I guess if the whores at Goldman maintain a "conviction sell," then I can easily see this stock testing new lows before the merger.
    2008 Jun 25 10:15 PM | Link | Reply
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    cos1000, I will tighten your numbers up a little, 2008 15.3 to 15.5 million new cars average penitration is about 50% (Until the fall when 2009 models come out then the rate gos up, really it gos up all the time BUT you know.) 7.65 cars have satellite radio installed out of 15.3 million cars. Just over 50% (XMSR says it is just over 53% but SIRI has said theirs is comparable so I will be conservative) take rate is 3.825 million cars that ether have a SIRI or a XMSR radio subscriber that leaves 3.825 million cars that are not converted but may be in the future. The problem is many as you said cos1000 can not get, is that every year SIRI has almost 200 million cost for radios that have not had subscribtions they pay another 200 million for the ones they do get. That is not counting retail subsities. So now what people dont get is that most of the loses today come because of the growth they are going after. They are paying ahead for the growth. It is the growth that they are going after that is making them non profitable at least for SIRI. I HAVE SAID THIS SO MANY TIMES THAT IS MAKING ME SICK.
    2008 Jun 25 10:34 PM | Link | Reply
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    cos1000, I just get sick of saying the same thing over and over again. I am also sick of people getting on Mel K. about how much he makes at SIRI, HE TOOK A PAY CUT TO COME TO SIRI PEOPLE. Now the only question I have is why, I know he and the chairman of the board at Viacom did not get along but he could have made more anywhere, so you have to ask your self WHY. I have said it once before what I think, but I will not say it again.
    2008 Jun 25 10:44 PM | Link | Reply
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    163888.....Thanks for tightening the numbers....I didn't have them handy so I used 12 mil to try and make the point. Vicar just pissed me off, knowing that he's not invested, and doesn't plan to, but then gives "novistor" advice as though he understands this company and its strategy. Other than arguing with us about nonsense on the Barron's article and talking in vague terms, I doubt he's read any of Sirius' financial statements, although I don't that he could.

    I don't know how you do it, continually rehashing the facts, but my hat is off to you. By the way: A celebration at 75 mil subs in Vegas sound great.
    2008 Jun 25 10:57 PM | Link | Reply
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    Did someone say Vegas? Count me in!
    2008 Jun 26 12:11 AM | Link | Reply
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    giving howard stern 500 million was stupid ...the merger should have been approved at least 6 months ago ....and now here's a scary thought ....suppose after the merger sirius will be of course heavily in debt .....what if some small start up competitor comes on the scene that is not burdened with all that debt .....let's say clear channel moves into sat radio ??????? bummer to say the least .....I'm heavy on sirius at 5 bucks , and it has been a very long troubling few years waiting on this stock to move up ....only to see it go further down than i could possibly have imagined .....the DOJ and FCC have committed criminal procrastination in order to pad the coffers with terrestial bucks ......the merger is in no way even close to a bad thing for consumers ....if sat radio is not a good deal , all you have to do is cancel your subscription !!!!!!! what in the heck is so dangerous about that !!!! the merger is a no-brainer , and should have been approved a year ago ....the last thing this country needs is another failed business .....sidenote to the FCC - " It's a frickin' radio !!!!! NOT a loaf of bread !!!!! "
    2008 Jun 26 01:24 AM | Link | Reply
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    shure46:

    Let me clarify a couple of things:

    First, Howard Stern was not actually given $500 million. He signed a contract for 5 years which included compensation and STOCK OPTIONS which, at that time, were VALUED at a total of $500 million. He's taking it on the chin as much as the rest of us, albeit to a greater degree than most, which would explain his obvious frustration along with the rest of us.

    Second, it is highly unlikely that some "small start up competitor" is going to come on the scene in SATRAD, since it would require them to launch satellites of their own, at a cost of about $500 million apiece. Space flight is not cheap. Clear Channel has had problems of its own lately, and the prospect of a combined SIRI/XMSR turning a profit is terrifying to them, which is why they've spent so much money attempting to kill both of these companies.

    Most of us on this board have seen the value of our shares tank in the last 2 or 3 years, but in the immortal words of Warren Buffet, "If you wouldn't own a stock for 10 years, don't own it for 10 minutes!"
    2008 Jun 26 04:17 AM | Link | Reply
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    Sirius Fan, when it comes to Vegas, the more the better.


    shure46, I cant believe I have to say it again. First SIRI did not just spit out a figure of 500 million (plus about 240 million in options 740million total) and Stern took it. That is most likely what he was bidded up to, just like how most content on satellite radio was over paid for. Second Stern was still well worth it. SIRI had just over 2 million subs that it took almost 2 years to get. In one quarter SIRI got 1.1 million subs and in the next year went from 3.2 million to something like 6 million. Most of that was due to Stern not the OEMs which were just starting to ramp up in satellite. Add to that that Stern gave SIRI a second chance to make it in the sector. Stern almost alone gave SIRI top market share over XMSR for the first time and for the next 10 quarters. Why for so long after the "Stern Effect" was over, well because from that point on SIRI was the house hold name not XMSR.

    Next as to why wont a new competer come in this sector, that is simple as *Sirius Fan* put it cost for one Satellites cost around 900 million after launch and insurance. Plus all the OEM contracts are tied up. Then think about it, why would they, they have seen how difficult it has been for SIRI/XMSR and the new company wont have the OEM market to help.
    2008 Jun 26 06:21 AM | Link | Reply
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    Vicar....

    Thanks for the comment. The answer to some of your questions have been written about or discyssed in the past, but here is a very brief synopsis:

    1. While I do post information about what analysts are saying, I am not parroting them in my own opnion. There are many anaylysts that I disagree with in several ways, inclusive of Goldman and CITI (the most bearish and most bullish).

    2. I have never appointed myself as a "satellite expert"

    3. I have stated many times that the upside is a long, that there would be heavy selling on the way up, and that it would take a "perfect storm" to get to pre-merger levels. That taskis even more difficult now. I do not give "buy prices" or "sell prices".

    4. This article was not about the accuracy of Goldman, but rather the attention he has received from the street, and will recieve again with his next report. Some of the items i disagree with Goldaman about I have expressed in the past.

    5. $1.50 is a possible bottom, but it is also possible that the bottom has already happened. A lot depends on the FCC news, as well as what Wienkes does with his next report. He does have the ear of people, so even if someone disagrees with his thoughts, they should listen to what he says, and when he says it.

    6. The top. As I have stated in the past, this equity will have challenges getting through the $3's even with everything going swimingly. Longer term, we will need to see the terms of the merger, how fast synergies acan be realized, a few quarters of joint performace, and get guidance.
    2008 Jun 26 07:39 AM | Link | Reply
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    sirius fan and 1638 , I know I was bringing up an old topic ...I just joined here , and I am sure all of you have already discussed everything I said in my post ......sorry to re-hash an old topic .....and I do plan to hold as long as I can ....the only thing now is to hope for a merger , and siri becoming profitable in the future ......unfortunately , I also think terrestrial radio companies will dog sirius with future lawsuits ( they'll think of something ) ....well it's going to be a struggle ..I just hope it's a struggle on the way up , and this company begins to turn a profit soon ......the ONLY thing that definately worries me is a bankruptcy
    2008 Jun 26 09:33 AM | Link | Reply
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    shure46, Me to, it is matter of financing if they could just get a decision that would make things alot more clear.

    cos1000, killierkaul, just got my last 3,000 at 2.86. We will see what happens from here.
    2008 Jun 26 10:14 AM | Link | Reply
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    Hey guys...... been back in the shadows taking it all in. Good comments above. Cos1000, 163888, Tyler........ I know you guys must be exhausted after this long, unequal fight. The rest of us really appreciate your knowledge, insight, and experience in this venture. Sat. radio is here to stay, however, any growth of siri prior to the merge surprises me. Look at the trepidation of all of the long term investors, worried about buying more stock at these prices at this time in the "dance", let alone new investors. Similarly, untill the merge occurs, the auto companies and new subscribers {used cars/new cars}, are sitting back {since they feel that the merge is only a blink away} waiting to see which radio and service to contract for. I know that's what I would be doing. New growth should be 0, for g.. sakes. The fundamentals of the sat rad industry have not changed from the view of the public, you or I. Disregard, and throw off the manipulations of all entities with selfserving interests, and you have, with the leadership of Mel. K. a company which will be poised to leap into the position cable tv occupies in the everyday lives of everyone today. It has a common label. It is called a necessity. WE will be in on the ground floor, poised to reap the benefits. Take heart, this is the final buying opportunity. Iv'e got a buy of $1.80s in for what may be my last buy before the end of the month. It aint Vegas, but let er run.... Good luck guys. Long Siri!!!!!!
    2008 Jun 26 10:59 AM | Link | Reply
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    anyone............ any new thoughts on the alpha article speculating on a microsoft, google, ge, rimm, etc, etc. etc. buyout of siri after the merger, at these bargain basement prices? Does sound mildly plausable/intrigueing.
    2008 Jun 26 01:18 PM | Link | Reply
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    tyler, NICE GOING on xmsr and siris from your bullish call!!! 50% of your bullish stance... NOONE HERE SHOULD HAVE LISTENED TO YOU!!!!!
    2008 Jun 26 01:56 PM | Link | Reply
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    I hate to be a pessimist, but I see the bottom for Sirius at around 1.50 per share. That is given the current economy/market conditions, the FCC damage, and the debt issues.
    There will be a small jump when the FCC does finally approve and Mel comes out with some guidance, but it may only take the stock to 2.00 per share.
    The days of dreaming for 4-5.00 per share are long gone. Stocks fall a lot faster than they climb. Every daily drop of 5-6% takes months/years to recover.
    Hope I'm dead wrong as I'm in deep in this stock, but I'm trying to face to reality of it all.
    2008 Jun 26 02:07 PM | Link | Reply
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    Agreed Bradley...not sure about the $1.50 but I agree with the rest. The long hoped for merger pop will not happen...merger is already expected and therefore mostly priced in. I think there will be a small move followed by selling from disappointed shareholders that had been hoping for more. Do you realize even $2.50 would equal a 35% gain from where we are now... I think even that is too optimistic. Would love to be wrong.
    2008 Jun 26 02:29 PM | Link | Reply
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    killerkaul, I agree I dont see the growth all that bad, concidering what SIRI/XMSR have been involved in.

    I will say, I found it interesting that SIRI did not drop that much concidering the Dow was down almost 360 points and the Nasdaq was down 80 points. So I would look at that and say it is a positive. I dont think we will see 1.5 unless some other bad news comes out. As I said, I think today would be the last day that would have anymore major selling pressure on it. I think we sit here in this cannel for a while until something else happens, matbe a little higher.
    2008 Jun 26 04:53 PM | Link | Reply
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    Keep in mind the sorry state that GM is in. Oh, did I mention that GM is a substantial growth driver of new subscribers to satrad?
    2008 Jun 26 05:19 PM | Link | Reply
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    163888, Killerkaul,......just got back and found my 2000 shares went through at 1.86 also. What a day. Goldman Sucks killed GM and Citi today. I agree that Siri is holding here at an average of 1.85-1.90, no serious down draft even on a bad day for the general market, damage was already done. I see our buddy Vicar is here adding nothing again, just taunting. Nice to be a pussy on the sidelines.
    2008 Jun 26 05:31 PM | Link | Reply
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    Cos, since you're so skeptical of my DCF analysis, perhaps you can do a better job pinpointing the actual value of SIRI on a per-share basis, and describe how you arrive at your conclusion.
    2008 Jun 26 06:05 PM | Link | Reply
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    I've been urging you to curb your enthusiasm for these stocks, as they have little upside, and downside is zero. You didn't want to hear that, so you tuned me out and dismissed me. Now that my advice has been vindicated with substantial retreats in the stock price, you taunt me. Research does not drive stock price. A profitable business model does.
    2008 Jun 26 06:08 PM | Link | Reply
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    Vicar.....if you had any skin in the game and if you had specific insight into this stock, I wouldn't dismiss you the way I do. Right now I'm a little busy dealing with the specifics of this stock to be debating what ifs with you. So please understand our perspectives and motivations are completely different. You want to talk about the philosophy and models you use when "thinking about" whether or not to invest. I have invested in this company and its real time situation. Your discussion does not help me now, its an annoyance. Come back to me in a few weeks when the FCC vote is in and we can sip some tea and figure out what's next, but in the mean time your just wasting my time and energy. So so long for now, please fasten your seat belt, look right, left, in front of you and behind you and remember.......the emergency door may be behind you. Thank you and good bye.
    2008 Jun 26 06:17 PM | Link | Reply
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    Vicar...do you not allow for the fact that there is a (difficult to quantify) value attributable to the POTENTIAL of a merged company? That given its position in the market and a technology that most users love along with expense and revenue synergies that they could significantly alter the look of your current DCF? Or perhaps look attractive to a MSFT, AAPL or GOOG as some have speculated? Asking seriously...
    2008 Jun 26 06:21 PM | Link | Reply
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    killerkaul: I would ignore the MicroSoft buyout article. It looks like it was written by someone trying to boost the stock price. MSFT is more interested in companies that are involved with personal & business computing software. I just can't see them buying a satillite radio company. A buyout by one of the major media companies would be much more likely.
    2008 Jun 26 06:21 PM | Link | Reply
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    cos1000, What pisses me off about people such as Vicar of Value (Dave) is that he thinks we are all idiots that we have no clue of the possible downsides of the stocks we own, are. He cannot comprehend that while we know of the down side, we just think the risk is well worth the reward. He wonders why we get mad at him, it is simple, no one likes to be told by anybody (especially somebody with no investment in it) that they have a terrible investment because of the risk we already know of. I could point out risk in every one of his stocks. Here is a good example I will give you of one of my favorites EXC. Now I could very well say, well you know, if a "3 Mile Island" (and there are many others) ever happens again EXC will drop to 2 dollars a share. Yet you would not see me going to varous blogs and saying that kind of crap unless I was invested in it. There would be no reason unless, I was a freak with to much time on my hands.

    Vigar of Value, If you would read the post above, you would see that the figure I gave, for total auto sales was very conservative. By the way of the big three GM has always been the lager of penitration. Also, you will see I was very conservative in all the places of up side in OEMs. The actual number of gross satellite installs in cars this year will be well over 2 million a piece.


    So we are clear I do not have a problem with descent on SIRI or XMSR. God and most here knows, I have said negitives also. The proplem I have is that people with no real interest in the stock try to come here and lecture me about the fundamentals. I think after being invested in in both for 7 years I know all sides, the good, the bad, and the ugly (sorry couldn't help it, big Eastwood fan, one of his best moves by the way, except "Kellys Heros").


    On that note, I will not bother responding to Vigar of Value again. That is saying a lot considering how much I love to debate.
    2008 Jun 26 06:35 PM | Link | Reply
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    Stan, I once again agree. I as you know think if that was at all possible it would be DISH or DTV. Only because of the synergies, that would be almost as great for that type of merger.


    I also have to say after reading your Bio from your articles can understand what I am talking about with Vigar of Value. You are by far no dunce, and know the downside risk already.
    2008 Jun 26 06:42 PM | Link | Reply
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    Roxianne: the more your enemies fear you, the stronger you are. We will win in the end.
    2008 Jun 26 06:43 PM | Link | Reply
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    cos1000, You beat me again to the punch. I just wasted time on that 6:35 post.
    2008 Jun 26 06:48 PM | Link | Reply
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    163888....well said my friend,.......You got to love Clint, one of the best.

    muley101....I agree, they might want the Satellite Network but not the content management....to far off their focus. If they did they would destroy SAT RAD as we know it.
    2008 Jun 26 06:49 PM | Link | Reply
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    163888......this is uncanny.....my 6:49 post was to you 6:35
    2008 Jun 26 06:51 PM | Link | Reply
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    cos1000, that was a good buy at 1.86, did you see the post before I bought at that price also. As you know I think the big selling pressure is off now and if it does not go up it should at least be stable. That is if the market would correct. If it keeps going down I still dont think SIRI will follow as fast to the down side.
    2008 Jun 26 07:04 PM | Link | Reply
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    163888.....Yeah you jumped in at 1.86 also. I tried to get in during the am. ext hrs. at 1.85, but 1.87 was the best it did. I think a small lot went in at 1.86. When I saw it was holding I set a limit at 1.86 and headed out for the day. The days range showed 1.80 -1.89, with descent volume, guess I could have done better. Yesterday in the morning I thought I might be able to get it today at 1.75 but it was pretty clear that absent any bad news, the back and forth is at 1.85. I am done buying for now until the merger decision. We gotta get some good news, because investors who own this stock are not just getting killed here but the broader market is venting wealth big time. Oil is the "Wet Blanket" on all things right now.
    2008 Jun 26 07:25 PM | Link | Reply
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    Well, I know 100 million is not alot. It does show XMSR is not as close to going bankrupt as many would think. It also shows that they are able to get some financing even during a time of uncertainty.
    2008 Jun 26 07:30 PM | Link | Reply
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    cos1000, Yea, but as I was saying before I was waiting for after the 9:30 open to see what would happen because of it being the time that margin/house calls would be forced to sell. The way I understood it, that Wed. was the last day but the margin department would wait til Thur. morning first thing to sell. Ithink that ment during normal hours.
    2008 Jun 26 07:39 PM | Link | Reply
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    I agree, I'd feel better for XM if GM wasn't getting hammered also. How do you think that will effect XM's credit facility with GM? I know utilization of the facility is some how tied to volume of signed subscribers for XM, read it in their last 10Q during that ARPU discussion.
    2008 Jun 26 07:42 PM | Link | Reply
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    I really dont think this down turn for GM is a long lived problem. Do you remember in the 80's, When everybody was worried about Japan buying pieces of america. I think we need to get back to buy american first again. I also could be wrong but I believe that credit facility could only be used for GM OEMs. Now dont get me wrong If they use it for GM OEMs then that means they have extra money to use for other things. So in general it is extra money that can be disbusrt by other means if you know what I mean.
    2008 Jun 26 08:00 PM | Link | Reply
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    I got to admit, GM's market cap just over 6 Billion, stock price lowest close since 1955. Whatever happened to "What's good for GM is good for the Country". GM now has a market cap in the bottom 30% of companies in the S&P. Your right that the facility allows funds to be spent elsewhere, I'm not sure if they are restricted, I'll check it tomorrow.
    2008 Jun 26 08:40 PM | Link | Reply
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    By the way, I think that share price of $11 and change for GM in 1955 I think is $93 in todays dollars.
    2008 Jun 26 08:43 PM | Link | Reply
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    163888......OK I couldn't wait until tomorrow. 10Q P18: the 100 million was built into the March 6th, 08, 250 mil credit facility that was established by "a group of banks" as and extension of the facility. The GM deal, is as you say, to be used to make payments to GM per their exclusive agreement. As of March 31, 08 there wasn't any balance due on this 150 million credit facility
    2008 Jun 26 09:56 PM | Link | Reply
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    I don't think Tyler was ever bullish on these stocks. More like a cautious bull.


    On Jun 26 09:16 PM GJELOSH197 wrote:

    > tyler go to hell you and your INCOMPETENCE~!!!!
    2008 Jun 26 10:30 PM | Link | Reply
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    cos1000, I thought so, it was a long time sense I read about it, so I was not sure if it had changed or if I was remembering it right. But as I was saying they then can use that money to pay GM so they will have their other funds freed up to put some where else. As we were talking before they pay out almost 400 million in a year for all OEMs, and as we know GM is the biggest supporter FOR **XMSR ** OEMs.
    2008 Jun 26 11:21 PM | Link | Reply
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    killerkaul , and a few others , thanks for shedding a little optimism on satrad .....I have been sweating bullets for years now , as I am sure all of you have , and it sucks ....I am definately glad to see it hold up after todays 360 point decline ....maybe that's a good omen ....and , then again at 1.86 a share , is there even such a thing as a good omen ???? ......I have both siri and xm , heavy on siri .....half my life savings heavy !!!!! So this buck fifty business is bumming me out big time .....BUT , no worries as long as the merger flies , and NO BANKRUPTCY ENRON CRAP !!!!!! I am half tempted to grab a few buck eighty five shares just to lessen the average down ( I am at 5 and 6 bucks on siri ) .....I am sort of curious as to what would happen if siri exchanged 3 shares for 1 xm , instead of 4.6 at the merge ???? I know it would be a hit on xm investors in the short term ( I have xm so I would get hit too ) BUT , ultimately with less shares , less dilution , and maybe siri would jump a bit right off the bat !!!!!! Maybe a 3 for 1 is better than a 4.6 for 1 , in the grand scheme of things ......and I can definately see now what "FCC" stands for , and it ain't Federal Communications Commission ....it's Fat Cat Crooks For Clear Channel Frickin' Crap Cowards ......well that would be FCCFCCFCC , but it fits well ......
    2008 Jun 27 12:32 AM | Link | Reply
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    ok , thursday 6-26-08 , 6:40 pm EDT ......( it is midnight when I saw this on the business wire ) XM has been loaned another 100 million dollars by UBS AG ( whoever that is ) .......so I wonder ???? would anyone loan 100 million dollars to a company that is going to die ??????????? Is this a reason to think that maybe someone out there thinks XM is worth a 100 million dollar gamble ?????? I would really like to hear some thoughts on this soon , because I am half tempted to buy some siri in the morning at 1.85 or better ......I just now saw this brief article when I clicked the siri news 10 minutes ago ......what's the implications ????? seems to be a reason for optimism to me .......I can't think of anyone extending 100 million dollars to a soon to be defunct company
    2008 Jun 27 01:21 AM | Link | Reply
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    Christ, I just saw the latest video from Cramer on this.

    Real rosy picture he's painting. These people are really starting to piss me off!
    2008 Jun 27 02:50 AM | Link | Reply
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    amazing is it not...

    Seems: GS and others keep forcing the prices down....one firm after the other...(who was it before GS?)... does this allow their trading buddies to pick up a few 100,000 stocks under $2...(for example)...?

    they damn well know too that this merger is 'Likely' (if they do not already know) to go thru...
    Scenario: a GS subsid.. buys 500,000 at say, $2, then next year SIRI goes to $10..... sounds like a good Scam to me...

    no problem with DOJ and FCC, Right... perhaps they are in on this too..... scaring little guys like us out of the stock... (maybe merger/maybe not !)...... I wonder what the men in 1775 would have to say about this... 1 if by GS, 2 if by the government...!

    stay positive Cramer...

    so hold on longs.... :/)
    2008 Jun 27 04:55 AM | Link | Reply
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    shure46, I had talked about the 100 million in my June 26th, 7:30 PM post. Also as to the 4.6 to 1 ratio, that will stay, anything else would require another shareholder vote which nether company wants. There might be a clause that lets them get away with some kind of % but it would be very small 4.59856 to 1 or something like that. That would also most likely be if one deluted their shares more then the other, when the deal was first struck.


    Sirius Fan, that was not the first time he was saying that one would go bankrupt if the merger was not delt with soon. As I said in the post referenced above I also think this shows they are not in as bad a position as Cramer thinks. Now please forgive me for believing the CEOs at both XMSR and SIRI that they both have the money/financing to go it alone if need be. The 100 million just shows that they most likely, have deals for financing that most people have no clue about. I also have said it before, I dont think The auto sector which is primed to make a constant revenew stream from these companies are willing to take a chance on lossing that, by letting them go under and lossing the deals they have already with them. There would be no reason the new company would have to honor even close to the original deal. Lets not forget GM is now getting about 5 dollars a subscriber a month. Multiply that by 1, 3, 5, 7, or even 10 million that is not chump change. it might be enough to restructure a financing deal or to up the credit from 250 to 500 million. I am just saying I dont think these companies are not a month or 2 away from being bankrupt, like some do. But that if anything they are at least a year away from that. Even then there are other avenues that can be followed like chapter 11 (which does not mean shareholders are left holding the bag.) which would let them restructure their financing and work out better deals with everyone from the OEMs to the content. Am just saying have a little faith.
    2008 Jun 27 06:44 AM | Link | Reply
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    As to the 6:44 post just above, 202507, I am not a financial adviser, I just have some common sence. That I share every once in a while. Most of the time that common sense, lets me make the right decision.
    2008 Jun 27 07:19 AM | Link | Reply
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    Here is someting I just read by homer985, in the Sirius Buzz Forums:

    XM already paid MLB the $120 million. They did it a month ago. The fact is, XM's financing can be confusing -- there are so many different aspects to it.

    The escrow account has been around since XM first signed MLB. They originally funded it via a $120 million Surety Bond that expired here in June. Rather than issuing a new one so close to the merger closing, XM funded it with cash on May 16th. To come up with this cash, they borrowed the remaining $62.5 million that they had left on their $250 million revolver -- and then paid the remaining $57.5 million from their $212 million cash on hand, at the end of Q1. This left them with $154.5 million cash... plus the GM revolver, which was $150 million... or $304.5 million total.

    XM then stated that they were going to borrow against the unused GM revolver during Q2, to help out.

    Then today, XM announced that one of the banks that are a part of their $250 million facility, agreed to an additional $100 million Term Loan. XM stated that they used these funds to pay what they borrowed against the GM revolver. Unfortunately, we don't know how much that is yet, since Q2 numbers aren't out yet. However, given that XM's total operating cash flow draw is typically less than $30-$40 million each quarter -- it was probably not very much ($20 million, maybe?)

    So doing the math, XM started the quarter with $212 million cash; plus had $62.5 million left on one facility; and another $150 million left on the GM facility... that adds up to about $425 million liquidity at the start of Q2.

    They then borrowed that remaining $62.5 million facility and used $57.5 million cash to deposit into the escrow account. This left them with $305 million liquidity for the quarter.

    They then got the new $100 million term loan -- thereby taking their total liquidity back up to $405 million for the quarter.

    Looking back, XM's total OCF burn during Q2 last year was approximately $27 million. So depending on how much negative the OCF was during Q2 this year -- it would be deducted from the $405 million that they had available during the quarter. (Keep in mind, any draws on the GM facility are a part of OCF).

    I'd guess that the FCF during Q2 (which is OCF + CapEx) was probably around ($50 million) tops... which again, includes any draws on the GM facility. So paying that off with funds from todays Term Loan -- and any other negative cash flow, will still likely leave them with over $350 million liquidity at the of Q2 here, IMHO.

    Let's also keep in mind that the escrow account that XM deposited $120 million in to. When the merger is decided either way, XM plans on replacing this account with another Surety Bond or a letter of credit from MLB. This will then free back up that $120 million back to XM for operating purposes.

    IMHO, XM has plenty of liquidity options at their disposal... for now... with or without the merger. But this could change. Regardless, the "demise" that has been speculated so much -- is done so by so many that don't understand their finances. Yes, they can still get new financing... and do have current financing.

    If no merger, the banks that funded their revolver (which is now $350 million) that expires next year will more than likely agree to extend the term. GM's $150 million facility (that is not in use anymore) that expires next year, will more than likely agree to extend the term. That just leaves the $650 million in maturing debt next year -- this will have to be refinanced. That is the biggest financing hurdle for XM if there is no merger. I believe they can refinance it, but the terms concern me.

    But if there is a merger, then XM has $1.04 billion in puttable debt, plus another $400 million in maturing debt. Then you need to add on the $300 million in maturing Sirius debt. This is nearly $1.8 million between the two, that will need to be refinanced. Other than that, I believe that XM's 2 facilities will remain intact and will likely get extended like I mentioned above.

    There's a lot more going on here than just subscriber additions and net losses.



    2008 Jun 27 08:09 AM | Link | Reply
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    163888.......I applaud you for not being an Analyst...LOL, Great job!
    2008 Jun 27 09:38 AM | Link | Reply
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    cos1000, I just wanted to show that Sirius Buzz is not a place for idiots that have no understanding of the finances or risks that these companies have. It is used as a place to get a hugh amount of information. I will say this I have debated with homer before and can say, he at the very least is well informed. He also feels XMSR is, the all be it slightly, the better of the two. That is where we tend to disagree.
    2008 Jun 27 10:37 AM | Link | Reply
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    cos1000, common sense or is it just luck (Dave), wins again just found out XMSR just refinanced 400 million more.
    2008 Jun 27 11:00 AM | Link | Reply
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    Shouldn't this qualify as good news? The market doesn't seem to care. Was this part of the "putable" debt they need to refi? The article indicates the interest rate was 1.75% and will now be 10%...is that right?
    2008 Jun 27 11:10 AM | Link | Reply
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    As I read the press release it sounds to me like good news that is conditioned on the merger going through.
    2008 Jun 27 11:23 AM | Link | Reply
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    cos1000 your boat is taking on water quickly. You've drawn the conclusion first (that SIRI is undervalued) then you've applied selective perception to find evidence that supports your pre-determined conclusion. Your sense of pride will not allow you to admit the flaws in your argument. Behavior finance at work.

    You prior statement regarding whether I have skin in the game (or who I am) reinforces my notion that you draw conclusions quite hastily, because you have no idea who I am or my background and expertise. If you did, you might reconsider your stance. I'm glad I don't allow you to pick my stocks or manage my money for me. A la prochaine, mon ami.
    2008 Jun 27 11:47 AM | Link | Reply
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    I smell frogs.....
    2008 Jun 27 11:58 AM | Link | Reply
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    Vicar of Value (Dave)......First of all: I could give a Good Flying French Shit who you are. The fact that your writing style and arrogant attitude makes you completely transparent allows met to draw my conclusion. A blind person doesn't have to see a rose or get pricked by its thorn to smell its fragrance.
    2008 Jun 27 12:18 PM | Link | Reply
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    Cos...........does that rose smell of perfume?........or does it stink?
    2008 Jun 27 01:13 PM | Link | Reply
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    ...and a gullible investor doesn't have to read the company's financial filings in order to make investing decisions that yield poor results.
    2008 Jun 27 01:14 PM | Link | Reply
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    cos1000, How many people do you know of, have made anything of themselves, that do not take a risk or have vision. I can't think of one. How many successful people do you know would spend one second on a post, on a stock they have no plans on investing in. Once again I can't think of one. I know I would not even bother to even think about spending any time on a stock that I was not going to invest in. I would consider that to be to big of a waste of my time, and I am retired.
    2008 Jun 27 01:18 PM | Link | Reply
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    Guys..... it's been fun and informative this morn. Got to go and try to make some mad $$$$$. Back soon. Hope I land more siri at 1.80. Thanks.
    2008 Jun 27 01:27 PM | Link | Reply
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    163888...have to throw my compliments to you and the tear-down of XMSR's debt structure. very informative & should paint a fairly clear picture for most who may not have dug so deeply...which i firmly believe includes many in the analyst community. not sure how they can interpret the liquidity position as any worse than it was in FEB 2007 when the stock traded at $15.

    there's a tremendous amount of pressure pushing both these stocks down & theyr'e not driven by fundamentals.

    vicar...while i understand and agree with your larger point that someone <<should>> have a clear idea of what a stock is worth when they buy it (i.e. where you expect to get out), you have to agree that the analysis you're putting into it is just as flawed as any of the other methods mentioned used to justify any of the rest of the group's decisions.

    further discussion of the point is only going to devolve into opinions about why DCF is/isn't more appropriate than top-line growth, SAC, net add momentum, etc...which, BTW, isn't the point.

    you did an analysis that generated a risk profile that you weren't comfortable with. i did another analysis and arrived at a different conclusion. i'm long XMSR since Q4 2006 & am looking for an exit with a small profit in the $20 range (standalone, not merge adjusted)...on the way up, if the business appears to be on more solid footing, i may adjust my perspective...but am sitting on the sidelines and expecting mel to perform as he has in the past...knowing XM should benefit greatly from his stewardship.

    make no mistake, missteps by both companies has contributed to the drop in share prices for each...but both have been knocked around MUCH more severely by negative PR and political delays that tend to create the kind of informational vacuum that gives articles like Wienke's MUCH more resonance than it deserves.
    2008 Jun 27 02:29 PM | Link | Reply
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    Vicar.......my post 6/26; 9:56 PM above referenced 10Q. I thought that was a company financial filing, my mistake again. You really are hear to kick folks around when their investments are down, aren't you?? As I said before you are a pathetic sad case, intelligent and well written, but sad just the same. Again another day of Blah, Blah, Blah from you.
    2008 Jun 27 02:58 PM | Link | Reply
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    Down where have you been cos1000, they are up, I guess I just made another lucky call.
    2008 Jun 27 05:07 PM | Link | Reply
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    ho I forgot, HE,HE,HE,HE
    2008 Jun 27 05:08 PM | Link | Reply
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    Hey I dont want to say this, but because I have made so many lucky calls, I think I would like my church built now. I must be a god right only god could be so lucky right. Because common sense and intelligence had nothing to do with it.
    2008 Jun 27 05:12 PM | Link | Reply
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    163888.....Don't you think that the shorts just locked in some profits before the weekend so they don't get caught with their pants down if there's some news on the weekend. It's the only real way for them to make money after a week like they had. No announcement on the weekend and they can continue their attack on Monday - Tuesday.
    2008 Jun 27 06:49 PM | Link | Reply
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    THE JURY'S STILL OUT ON THIS ONE.............. HAVE A GREAT WEEKEND GUYS.................. RUN BLUE DOG RUN!!!!!!!!!!!!!!!!
    2008 Jun 27 08:51 PM | Link | Reply
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    yoyoYO 6-27 2:29 PM ...........good post , makes sense , thanks .......and killerkaul 6-27 8:51 PM , thanks for your optimism , I needs that right now !!!!!!!!! and yes I hope that dog gets off his butt and runs like hell soon ......damn hound
    2008 Jun 27 10:26 PM | Link | Reply
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    Yoyoyo, sorry it took so long to return to you. Just wanted to make sure it was clear that my post was the 6:44 AM, and the 8:09 AM post was just me reposting of information **homer 985 ** put out. I feel the need to give credit were credit is due. While I have seen the figures put out before I would not take the time to explain it as well as homer did. As you are able to see from my post (6:44AM) I give a more simplified form. Both come to the same conclusion though. By the way you are also a very good debater. I have to admit I kind of keeped it going just to injoy the banter back and forth.
    2008 Jun 27 10:51 PM | Link | Reply
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    Just for you Yoyoyo "keeped" should be "kept". LOL
    2008 Jun 27 10:53 PM | Link | Reply
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    Just to let everyone know the 5:12 PM post was a dig towards "Vicar of Value" I just had to do.

    cos1000, If that were the case why did the shorts not do it Fri. of last week, it was down even more then. I first of all think it was as I said that the bottom was about where we bought, it due to alot of selling pressure being taken off. Look at it this way if the market was not down 340 and 80 we most likely would have seen SIRI higher then it was Thur.

    While there are no guarantees, I believe something is up when a 1.85 stock jumps .27 in 2 hours. I have seen it to many times, the stock jumps for no reason then some great news comes out a few hours or days later. I dont think it was the Apple thing that has been out for some time. Also the same gos with the 100 and 400 million refinancing. That was known about, first thing this morning. I believe that at least one commissioner will show that they are for the merger. On this though, I also dont think that news of Mcdowell would send the stock up that much. People at this point want something more concrete then a person that we already know would vote for it. All I am saying is that a .27 gain on a stock that was 1.85 just before, in a way down market, just doesn't jive with me. I believe something else is up, what it is I am unsure of.
    2008 Jun 27 11:33 PM | Link | Reply
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    163888.....As you know, I hope your right but, last Friday everyone was in a panic and the greedy shorts were hoping for 1.50 - 1.75, just like we would be if we were in a "short" position. As you have always said and I agree, you didn't make any money long until you sell, and you can't make money "short" until you buy. With the end of the month on Monday, its time to get out on Friday, if your in a "short" position. Like I said, I hop Your right on this on, Monday-Tuesday will tell.
    2008 Jun 28 10:02 AM | Link | Reply
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    cos1000, If I am, if I am. I have to admit it is not a sure thing, but common sense tells me; If it has happen before chances are it will happen again.

    I will say, I cant wait for a decision (positive hopefully). Then I will be able to give Dave both barrels on why this stock is a good play for people with vision, actually for anybody that is as blind as a bat could see. Once I expain it, I think even he will be sad he did not get in at 1.85. killerkaul knows why I dont like saying it before a decision is reached.

    In closing we will see if I got LUCKY again. With luck like mine I wonder why I dont play the lottery. LOL
    2008 Jun 28 11:04 AM | Link | Reply