Giving Cramer the Benefit of Sirius Doubt 19 comments
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As any Sirius (SIRI) investor knows, Jim Cramer has seemingly been attempting to pummel the stock lately. There seems to be a mass knee-jerk reaction to perceived negativity, with no one venturing out to look at whether or not his statements have any merit. In this case the argument stems from opposing viewpoints, yet all parties seemingly have the same facts.
Firms such as Merrill Lynch and Citigroup have set much higher price targets than Jim Cramer and Goldman Sachs. Just like Republicans and Democrats, they are looking at the same picture and arriving at opposite conclusions. It’s easy to see the reasoning behind Merrill Lynch’s Jessica Reif Cohen’s analysis of the stock as she continually provides updates and gives solid reasoning for her methodology.
In the case of Cramer, he seems to offer only opinion and that is where the problem lies. According to a recent filing from Goldman Sachs, however, his opinion may be based on certain facts that I have discovered. As it turns out, Goldman Sachs owns nearly 130 million dollars worth of those February 2009 convertibles that Jim references in most of his Sirius XM “bashing sessions.” Most people understand that Jim worked for Goldman Sachs and it would stand to reason that certain “information” found its way to him from the top. I’m not saying Goldman is manipulating the stock price, I’m just saying Jim seems to be warning people that that the price may be manipulated going into Q1 of next year. That’s not what a bad guy does. A bad guy would tell people to buy despite the risks.
Everyone is blaming Jim for the merger deal getting killed initially and forcing Sirius into a corner. It is beginning to look more to me like Jim is a pawn in all of this. What appears to be Goldman padding their already beefy portfolio with Sirius XM stock is more likely to be short covering as the “bond bullies” of Goldman and Friends keep manipulating the stock by shorting and covering; over and over again just as Jim stated. The conflict boils down to the perceptions of traders vs. investors. The long term growth prospects of Sirius make it an appealing stock to own, but short term bumps are something a trader would play rather than go long on.
Not coincidentally, I’m sure, Jim has come out and stated as much without naming names or pointing fingers. When Mel did the Mad Money interview, he also gave insight into this problem. Cramer has suggested that people looking to initiate new positions wait until the refinancing deal is done in February. That’s probably a prudent thing to do if you are in his line of work. Mel stated that the company is working to get this convert issue out of the way. An investor, on the other hand, would use any dips to lower their cost average.
The prospects of Q4 could cause the company’s stock to reach that magical 4.00 price at which time the convertibles would execute the swap and go long. In my opinion, Cramer may actually be looking out for the little guy in this as I believe he was just as blindsided as the rest of the Sirius XM investment community - but of course he cannot admit that. It may be time to give Jim the benefit of the doubt, and begin a conversation about what to do about the convertible situation and the arbitrage that has been plaguing shareholders.
In my opinion I believe this is the first priority of Mel and Co.. I believe they are working diligently behind the scenes to get these matters in order. As an investor, I’ve certainly had ups and downs but I’m ok with that because the long term prospects of the company are sound in my opinion. Is Sirius a stock for the weak-hearted? Possibly not at this time. Is Jim Cramer doing what he feels is right? Probably so based on the information he has.
Position: Long SIRI
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This article has 19 comments:
Your correct, Jim Cramer is the one manipulating. LOL
Now, if you want to tell me WHY they are shorting the stock at 1.40, im all ears, because you and everyone out their offers NO information. NONE. O . Message boards offer more than you. So stop writing Sirius articles if your not going to offer new information. Thank you.
The company will make tons of money sooner rather than later, at some point one of the really BIG boys may even buy it at a nice premium. But at this time the stock sucks as an investment and is almost impossible to trade because of the manipulation.
BerkeleyBob
The one's to blame here are the #$&%^% FCC and the damn politicians who jerked every single investor around by jerking these two companies around until their fundamentals were damaged (maybe beyond repair). The politicians in the pockets of the cable industry and Clear Channel are the ones to blame here.
Brandon has been nothing but positive on Sirius XM. He simply takes one step back from the hysteria you freaks are in to think that perhaps Cramer is not the devil in disguise that you all paint him to be, and now Brandon is a traitor to everyone!
Perhaps these are the unsophisticated investors that Mel was speaking of.... Cant look past their own noses at a possibilit, even when it is posted by a Sirius XM supporter. Rediculous.
any advice?