Has Jim Cramer Crossed the Line with Sirius XM? 114 comments
-
Font Size:
-
Print
- TweetThis
As expected, on the heels of three separate positive analysts’ reports this week that included Citigroup (C), Stifel Nicholas and Barrington Research, Jim Cramer has come out again to bash Sirius XM (SIRI) and its shareholders.
In this latest attack, Jim may have finally opened himself up to a lawsuit, as he outright lies in some of his assertions, which I will explain. You can’t get sued for an opinion, but you can get not only sued but prosecuted for spreading false rumors about a company, which in my opinion, is just what Jim Cramer has done. Let’s highlight this statement of Jim Cramer:
However, more important, this quarter is a disaster for Sirius as is the next one because the deal came too late to salvage the Christmas retail selling season and the fall auto season. Missed ‘em both. Brutal.
When breaking this down, we can easily find all the flaws and fear mongering of this statement. He claims this quarter will be a disaster for the company. In a way, that may hold true, as there will probably be merger related costs that cut into Sirius XM earnings. That is, of course, only if the synergies announced do not materialize in time, and we can see that cost cutting continues to be a priority of the merged company.
His next claim that approval came too late to salvage the Christmas selling season could not be farther from the truth. Besides the company already announcing that new radios will be in stores by Christmas, there is also the open access provision mandated by the merger which allows just about anyone to enter the retail satellite radio market with their own branded offerings. This will not only increase retail subscribers but will also result in lower costs as Sirius XM will not subsidize these radios.
His most outlandish claim, and the one that may end with Jim Cramer in a courtroom, is the outright lie that Sirius XM has somehow “missed” the 2009 OEM model year. The fact is that the companies are continuing to operate separately as XM and Sirius regarding the automotive channel. Nothing has changed. OEM installation rates of SDARS have continued to increase. There has been no slowdown in this regard nor will there be. In fact, the target remains at 70% penetration for the 2009 model year. The OEM’s benefit from these installs and as such are doing whatever they can to increase their unit profits.
Should new radios be introduced, manufacturers will conduct a “running change.” This occurs frequently in the manufacturing process when parts changes occur due to such things as component problems or supply issues. A worse case scenario would mean that 4″ wiring harness adapter would be needed to install a different radio than the one already prepared for, and wiring harnesses with a new radio connection would then be used to make the process seamless.
Of course, Jim also had to rehash the refinancing issues of next year, completely ignoring Merrill Lynch’s assessment that at most the dilutive results of complete refinancing in a poor credit market would only result in 17% dilution as a worse case scenario. Again, he fails to mention that Merrill Lynch’s Jessica Reif Cowen says this is very unlikely, and instead operates under his own agenda. For instance, 17% from $1.35 is $1.12, yet Jim insists the stock would go below a dollar. He also seems to overlook S&P’s recent upgrade.
At this point, it is clear that Jim Cramer intends to cause substantial harm to Sirius XM and its shareholders. The proof being that the company has offered guidance following Labor Day. Yet, Jim insists on doing whatever he can, including lying to bash the stock lower before the company’s conference call, which, of course, he again fails to mention, to drive the price lower.
In addition, despite Mel’s interview with Cramer acknowledging that there will be no reverse split, Cramer again comes out and makes a case for it. I would bet that right now, Sirius XM attorneys are preparing the paperwork necessary to bring Jim Cramer to justice.
Related Articles
|
-
The Seeking Alpha 100
See allThe top 100 stock
market authors
selected for publication
Seeking Alpha 100 » -
Fastest Climbers
Authors with the largestSee all
increase in followers
in the last 7 days
Fastest Climbers » -
Top Commenters
Top commenters,See all
as ranked by their peers
Top Commenters » -
Top Instabloggers
The 100 most active
Instabloggers.-
1
David Fry
-
2
TraderMark
-
3
Don Dion
-
4
Cliff Wachtel
-
5
Mike Havrilla
Top Instabloggers » -
1
-
Top StockTalkers
TopSee all
StockTalkers.
Top StockTalkers »
This article has 114 comments:
maybe siri should offer him a channel and pay him what he is really worth. lets say a lotto ticket a week.
It's not Cramer selling SIRI stock at $1.33.
Cramers constant bashing of this stock just proves it value, actually. I kind of find it amusing. But I do feel for the margin people or the peopel who are stupid enough to buy high(only when Cramer will ever recommend a stock) and sell low. He makes a ton of money for his people, so sue who pays him, and him as well. Probably wouldnt be too hard to follow the money trail. This stock will be at 10 dollars some day, minimum. Of course Wall Street wants you to sell. Thats THEIR money, not yours. Wall Street was invented to take YOUR money and make it THEIR money. You can win if you do the opposite of what THEY say to do. Just be careful, because sometimes they know this. But in this case, with how this stock played out, the merger, etc... Its very unlikely that Cramer is actually looking out for your best interests. No one on Wall Street gives a Rats behind about you, or your portfolio. JUst keep buying high and selling low, so the banks can get back into the green.
At Schaeffer’s Investment Research site, the amount of “short” interest, charted over the last month, since Cramer’s flip flop and Winkes new SP target, go hand in hand. The comparison is dramatic. Comments by Cramer tied to shorting activity are a direct correlation. Short interest way up, Cramer bashing way up, stock price down. Nice job Cramer and the shorts.
I am a long and hope that Cramer is dealt with in the court of law for his outrageous positions on this stock and company over the last year.
I think you're giving Cramer more attention and credit than he deserves. In fact, some of my friends and I use an anti-Cramer strategy.
For example, on 8/21 he recommended WMT over TGT. As you might expect, WMT bumped up from $58.50 to close Friday at $59.44. Up 94 cents (+ 1.61%) on the day. Yesterday, one week later, WMT is at $59.29 - up only 21 cents (+1.35%) from a week ago.
On the same day, he recommended dumping TGT for WMT. TGT was at $51.06 yet closed Friday at $52.66 - up $1.60. (+3.13%). And, as of yesterday's close - $52.85 up $1.79 (+3.51%).
Let's face it; Jim can't control what's going to happen. More often than you think, being a Cramer Contrarian is the better play.
SIRIUS XM is a great company with fantastic management, give them time, all this attention must tell you something.
The smart money has moved on -- but the dogs on these message boards are still barking about its "upside".
I wish that the FBI would get a wiretap on Cramer and start collecting information to fry him. He is not a good person and deserves to be trated as such.
Apparently your research skills are lacking as I have written many scathing articles regarding Sirius. I resent your accusations as they are false.
you must be a lonely person.. you seem to be on this blog to get attention. If you hate this stock so much, why are you spending so much time bashing it... do you even own this stock???
Quit arguing about Cramer and giving him the attention that he doesn't desire, issue a OTC stop limit with your broker on an amount that you are comfortable with and stop watching the stock.
Paying $500,000,000.00 for someone to fart over the radio ???
"Investing" in it was/ is/ and will be stupid.
"educated" prognostications simply fall flat these day's, and he has resorted to CEO interviews, and very partisan patronizing or advertising for the benefit of the various companies he favors that moment. I think the public is finally catching on, and it is affecting his shows ratings.
Why Buy a CD? When Sirius gives you much more variety to listen to? Although, I do like you comedy act on these blogs. It is sort of reminiscent of Jack Benny. Try reading George Santanya, and apply it to you comments. Then you would understand what being whole is. Just remember, A life without rain will not nurture life, as much as a life without sun. I’ve seen some realistic negative perspectives from bloggers to which you don’t respond. It is usually during an uptick in price. Is there a reason you don’t show up during upticks???
Please GE, get this bozo off the air!
I am curious - is the writer of this piece wrong or lying about what Jim did? I would bet it's much easier to prove slander and libel in this case than the one the writer believes he has against Jim.
Like I said anyone who picks stocks based on a T.V show shouldn't be trading at all!
O.K. All, I've been reading these posts and some of Brandon's articles for a little while now. I can't blame him for sticking up for his stock. I have just gotten in long on SIRI this month, so most likely I'm nowhere as hurting as probably many here. I do feel for you as I used to trade more than I do now and have "been there". However, there is really only one way to look at the situation short term. And it has little to do with actual profits or the notes coming due in-of-themselves. As you all know, stocks are based solely on perception. Also as you know the majority of the money on just about every stock is made on the short side. Why? because it's way easier for the big players to exploit fear than euphoria. So, what's my point?
The point here is that just like in any situation where bad news (or the perception of it) comes to the fore, the first thing that happens in the premarket or after hours (which is equivalent to the wild wild west) the shorts pounce. By doing so they get people like us to jump off of buildings, thinking our fortunes are gone for ever. However, what's important is, in order for those shorts to actually retrieve their money, they have to buy back. Look at SIRI's chart. As Relmor said, the stock will stay where it is until the shorts decide there is no more money to be made. And as we all know there are some BIG players involved with this company. Sometimes this happens as a V or sometimes it's a U. So here we are now one month into what is turning out to be a U-since the shorts pounced in July when the stock was still 2.50. As Mel said, this is a good company with a solid future delivering next generation content. FM radio? If you think that's the future, you haven't been on this earth long enough. What you are looking at now is a rubberband that has been stretched and the only way it has to go now is back up. How far? That's the million dollar question. But I can say with some certainty, which the charts bear out, it will be back to 2.50 when the shorts begin to panic on some positive news. My guess is this will happen in the next month, or two tops. Again, as soon as the shorts get bored being range-bound in this area right now. What they will do soon is buy back, drive the price back up and then hope to set themselves back up for the same kind of take down from 2.50 back down to here (1.30 - 1.50).
Some here might not remember '03 when SIRI was .76. At that time they had no revenues period, no Howard or any of the other celebs they've got now. After the Howard deal, which put them even in a bigger hole finacially, the stock soared eventually to 9. Why? Don't forget they still had 0 revenues. It was only because the shorts gave up and then also saw more opportunity playing long instead--so they piled in. As I said, the short positions own Wall Street. Nearly every stock you own will only go up when they let up their selling pressure--which they can create at will, whenever, whereever.
So to all the longs operating within the range I have mentioned, don't give up hope. Change is VERY imminent. Don't forget, the shorts need to take profits just like longs. Look at the action today, this is a group of shorts taking profits and protecting a little just in case Mel announces something on Tuesday morning (as he said "after Labor Day). Eventually, into next year and not far thereafter, SIRI will easily be a 10 stock--no problem. They were once without any revenues, and look at XM, they were always a 10-12 stock (and now we're seeing how much debt they were carrying). So for those with a 2 year time window, SIRI is a great investment to make a lot of money. The farther we get from this merger debacle, (Wall Street has a very short memory), SIRI will once again look like the very attractive spec play it always has been to the big boys. Even shorter term, this can be a very tradable stock. And don't let Cramer shake you. He's just a rogue dude with an opinion. If you listen to him and buy on his advice, it's like getting a "tip" from the jockey's room in horse racing. Those rarely work in the favor of the guy going to the mutual window. Peace..
Stick to sales, cost of sales, ROE, price/cash flow, etc.
Otherwise, take it to Yahoo.
Really? Is that what you think drives most stocks and more specifically SIRI? Is that what you think is driving oil? News flash...the main driver of nearly all stocks is speculation and perception. Technicals are great for some stocks but not most. And that doesn't only happen on Yahoo...
II suggest you go examine those technicals you mention, on SIRI from '03 - '04. They had no sales, no ROE and their cash burn was through the roof. Somehow, they became a $9 stock from .76.
The fart jokes about Stern are so off base, he has turned into a Manhatan yuppie. If you have never heard the show, your missing quality content...check it out.
Think about this. Was SIRI any worse of a company (or better yet, product) the days before the merger approval, when the stock was almost 3, to the days after when the stock crashed to 1.50? The answer is no. In fact they are a better-positioned company now with great upside. What can one say? when the shorts go after you, it can be with a vengence.
Lastly, if you check their chart, you can see a classic double bottom forming. This last dive, they did not take out the 1.26 low--closing or intraday (which is very important). Experienced traders know what the double bottom means. It most often means the bottom is in. Now, a little positive news, maybe an announcement or two from Mel next month and SIRI will be off to races...if you think Sirius is standing still doing nothing behind the scenes, like I said, sell, sell, sell!
www.youtube.com/watch?...
First, you claim that Cramer's assertion that the merger came too late to salvage the Xmas shopping season is a statement of opinion, not fact. Second, you later claim that Cramer's "lie that Sirius XM has somehow 'missed' the 2009 OEM model year, " will also land him in court, is also statement of opinion. "Somehow?"
Clearly, you're long SIRI & wish to do nothing but lash out at anyone you believe responsible for the stock's recent poor performance (i.e. shorts). Unfortunately, your arguments are neither legally sound nor persuasive.
If you can't stand the heat or cold of the market, my rec is stay on the sidelines.
Look at what Fannie and Freddie have done in the past few days and see my article which is a direct contradiction of Cramer: seekingalpha.com/artic...
I bought at $4.77 on 8/21 and it is at $7.87 today, 8/28.
Like all of us, he has his ups and downs, but is hardly reliable over the long term. Look at his favoritism toward solar and yet he suddenly changed to wind! Look at his obsession with natural gas and CHESAPEAKE ENERGY !
Like most investors, we listen to a lot of so called experts, but god forgive if we only base our judgment on one only; not even Warren Buffet's, but at least Buffet is strong enough to accept mistakes.
The problem, as with all cheap tabloids, is that you give people what they want, and with an average investor so fickle-minded , likes of Cramer are the only ones being heard (listened to) by the masses.
Once he fails over and again with his predictions, he will fade into oblivion. The best thing for SIRIUS XM is to ignore him and invest their energy and resources in their capacities. Otherwise, they shall frighten away the average investor and provide more room for Cramers and alike.
I have to admit the video does give a perspective of Cramer that all of our words together can't possibly describe.
Is he in jail?
Get real, nobody gets prosecuted anymore, unless you're a tiny little guy. Cramer is a peon whose job is to strip you of your money, and this country doesn't work for you, it works for the same people that own Cramer.
By the way, there is one more thing: For all the people who are personally bashing shareholders who hold stock in SiriusXM, I have a short comment: Are you constipated? If you are, I'd offer that you chill out, take a dose of Milk of Magnesia and lighten your loads -- the stuff your spewing out the wrong end of your body stinks....
www.mainstreet.com/dec...
www.mainstreet.com/dec...
Again, The Vicar does not give stock tips for free, or else his advice would have no value. However, he favors companies with solid growth prospects, expanding gross and operating profit margins, prudently managed balance sheets, and growing free cash flow as a percentage of revenue. Growing market share versus competitors is another metric, as well as high return on invested capital and a track record of profitability. Most importantly, reasonable valuation relative to growth prospects with a PEG ratio preferably less than 1.0. He also prefers organic growth to growth by acquisition.
Rather than give individual stock tips, The Vicar believes in giving receptive investors the correct knowledge tools that will empower them to experience the thrill of picking a winning stock for themselves. Does this make sense, Mr. Scot's?
My problem with satellite radio is that it seemed almost guaranteed to take over the airwaves. The FCC basically dragged their heels in order to give their buddies in the terrestrial radio business time to develop an alternative to the technology (HD radio).
If you're angry, get angry at the obvious corruption at the FCC not Cramer for pointing out the obvious chinks in SiriusXM's armor.
It could be worse, you could have Bloomberg reporting the CEO of your largest investment is dead. I lost at least $1,000 today because of that error in publishing.
Sirius, as all the real money people know, is based on an outdated business model that goes back more than twenty years, BEFORE the internet. If you want to see what happens next, look up a company called Iridium. They went into the satellite phone business about 25 years ago, waiting for a gold mine. While they were putting up satellites, somebody realized that you can blanket the earth better with cell towers. As a result, the company went out of business, and the only people who use that phone system now is the Department of Defense.
The same thing will happen to Sirius and Karmazin knows it. While they were putting up satellites, somebody invented the internet. Now, it's just a matter of time 5-10 years, before you can get the interenet wirelessly consistently anywhere above ground. At that time, those satellites and receiver radio business that Sirius owns will be worth?????? In five years, Sirius will be a content only provider and the hardware will have been sold to someone else, OR they will be out of business entirely. By ten years from now at the absolute latest, people will get Sirius exclusively by internet or cell phone, if the company is still around at all.
The Vicar is glad to have another voice of reason to reinforce his skepticism of this unprofitable company with the dubious business model. Welcome aboard.
I quit watching him and CNBC
I quit watching him and CNBC
It is obvious Cramer is a mouthpiece for others. So the question is what does Cramer get out of it? In this case we have Cramer bashing a stock but my major problem with him is the exact opposite. Cramer loves to pump stocks with very high short interest because he knows they are easy to move. The sheep follow his recommendation, the stocks spike, and soon a violent short squeeze ensues. Soon afterwards the stocks are lower than when he made the recommendation.
I have followed Cramer since the late 90s. During the tech implosion he was telling people to buy all the way down. He became bearish AFTER the NASDAQ had dropped from 5,000 to 1,700 but of course he stated numerous times later that he was bearish on tech stocks at the top. Look at some of his recommendations last year. He was pumping the worst of the financials - CFC, TMA, DSL, etc.
Earlier this week his main topic was why you should buy homebuilder stocks. He went on to say that he called the top in housing stocks and has never recommended buying them since the bubble busted. That couldn't be further from the truth and a quick google search will return numerous articles completely refuting his claim. Not only is what he said 100% false but he was telling people to buy them when they were AT THEIR ALL TIME HIGHS and has called a bottom at least 8 times since early 2006. It is amazing how reality is the polar opposite of what he claims. At the beginning of 2007 his top sector pick was financials. His top pick was THE WORST PERFORMING SECTOR!
What amazes me is that number of people I hear say "I watch Jim Cramer every night." There are a lot of stupid people out there. There are numerous videos at youtube that expose him for his blatant lies. If nothing has happened to him yet I doubt anything ever will. The man is untouchable.
I remember the hype when TIVO came out. I do not have TIVO, but I have the technology (Direct TV box.)
....must be all suffering right now.
A question: why do I need that sat radio if wireless broadband will soon become ubiquitous? Do I really need to flip through hundreds of channels while driving a car?
He's twice as likely to be WRONG. Here's his current YTD performance:
Jim Cramer's "Mad Money"
Buy Recommendations
2008
PERFORMANCE SCOREBOARD
01/01/08 to 09/15/08
TOTAL: 166* WINNERS: 55 LOSERS: 110 UNCH: 1
Total Portfolio Performance: ** -10.29%
Cramer is a blowhard and a clown.