Why Is Sirius XM Radio Stock Going Down? 118 comments
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Let me answer this question, before you ask. A lot of people are under the impression that SiriusBuzz is some sort of Sirius XM (SIRI) stock pumping site. Nothing could be further from the truth. In fact, I recently suggested to all our readers that they should put stop losses in at 1.20-1.24 as the stock had broken yet another bottom. To those that listened, congratulations!
To those that did not and want to know what happened Tuesday, it can be summed up simply. Mel Karmazin, in my humble opinion, gave the worst speech of his life. Despite a lot of good news coming forth from the conference, Mel made a few statements that would have been better kept to himself.
When asked about financing of the 2009 converts, Mel initially was adamant that no dilution would occur. He offered up an exceptional plan that outlined the company’s ability to use cash on hand together with bank loans. Later, however, he went a little farther into detail, making the statement that he hopes he does not have to lend the company money out of his own pocket.
Excuse me? Mel just told Wall Street that he believes in Sirius XM so much, that even he does not want to lend the company money! How then can he expect a bank to do the same? A slip of the tongue? An accidental joke gone astray? Absolutely, but the effects were seen in the stock price depreciation Tuesday.
The other huge mistake was reporting low-ball estimates so low for 2009, that most analysts will have to lower their forecasts. Mel might as well have said not to bother to buy the stock until 2010, because he was so conservative with the subscriber estimates for the year, that he inadvertently lowered guidance.
Of course Sirius XM will sign more than 2 million subscribers next year, but Wall Street can only go on the data provided by the CEO of the company. Mel in effect stated that the company would see ZERO subscriber growth in 2009. In fact, his estimate for 2009 will be less than the expected total of 2008. All this on the heels of an exceptional presentation outlining increases in OEM penetration rates.
Another mistake? Of course. Any idiot could see that. The problem is there are not that many idiots on Wall Street. When Mark Wienkes and Jim Cramer get a hold of this, there will be hell to pay.
Disclosure: No Position
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This article has 118 comments:
LOL!
The merger is a turkey. Anyone who cannot see this now ought to have their eyes examined. SIRI was in deep trouble when it started. Mel brilliantly sold a bill of goods to the big institutional shareholders of XM who also happened to have been total idiots. So, instead of $12 or $18, XM shareholders got, well, $5/share.
XM management was just too stupid to realize they were being had. So, after the NFL failed to bail Sirius out, after Stern failed to bail Sirius out, XM unwittingly agreed to bail Sirius out.
XM management screwed its own shareholders worse than in any transaction I can remember.
F u c k e d by DOJ, FCC, GS and now Mel. Who wants a shot next. I just stand in the street with my paints down hoping for a drive by.
Don't be a dick and beat people when they're way down. You are unbelievably messed up.
Two things:
1. Lose all your investment.
2. Be rich.
Which one would you want?????? I want #2...but you can't get #2 if you cry like a little girl you have to be strong and hold that's the only way you strike BIG!!!!!!!!!!!!!!!!!!!...
Good Luck
what kind of a name is that?
V 4 Victory
I 4 Income
C 4 Crazy
A 4 Award
R 4 Rich.
Be nice to people the world will be nice to you.
This stock will go thru the ceiling in the next two years.
I can't wait.
Who hear doesnt pay for radio? Well, thats about to change.
You see, gentleman, in a true capitalistic society, you must pay for anything good. Or you get crap. Normal TV, is crap, normal radio, is crap. Free magazines are crap.
Free newspapers are crap.
Media if you dont buy it, is crap. Soon you will have around 25-30 million subscribers, and Sirius will be in the black. Unlimited potential to use satellite technology, add revenue. They will do more TV too, look for them to steal even more bandwidth of that in the future. Sell now, and you will wish you hadnt. Now if you want to sell on jumps and rebuy, thats a good idea, just dont ever be all out, cause the market will NEVER let you sense a jump is coming. A lot of you sound like youve never lost 80 percent on a stock before, only to go the other way. It happens all the time people, especially with companies that have never made money.
At this point, the best guess is delisting notices by January, bankruptcy filing or a sale for pennies early next year. In retrospect, they should have let XM go and tried to pick up the assets when XM whne bankrupt. One more thing, if you're looking for stock advice on this forum, maybe you there might be better ways for you to spend your money than the stock market?
As for Sirius, Ive never seen a stock trading at 6 times lower than its projected price. Its not trading 40 percent lower than the worst analysist opinion. A few articles by the WSJ and Barrons, and everyone believes this lie. If you havent noticed, you do the opposite of what Cramer, the WSJ, and Barrons tell you, and eventually, if your able to hold your positions, you will make tons.
One small example for the sheeple.
Cramer:Buy Yamana gold at 17.
Cramer:Sell Yamana gold at 11.
Cramer:Buy Sirius at anything under 5.
Cramer:Sell at .90 cents. Buy bonds you cant obtain.
Watch Harold videos on Youtube, hes hilarious. He tracks Cramer.
I want you to know right now Vicar, you agree with Jim Cramer. No one has ever made money listening to him. Cramer said JPMorgan would be a safe financial stock. This was when it was at 48.
Take away todays bs rally and it be under 40. He said buy MSFT under 30. LOL Its going to be under 30 for a long long time. He said GE was a good buy at 36. ITs 28 now. He said Apace Coal was a great buy, in May. Eveyone knows the commodity cycles arent good for buying in May. He talks advantage of new investors. You sound like one.
[Cos: Unless you write to us we have no way of knowing for sure who is who. If you notice something similar in future, please send an email-or write it as a comment an d "report abuse" on that comment, which will get it fast attention. - SA Sr. Editor M. Hunt]
: )
Look at my old posts... thats what I have said numerous times. No one listened. Everyone was just preaching Chapter 11
[Cos: Please explain where you got the idea that 163888 has been banned. He/she has not been banned. - SA Sr. Editor M. Hunt]
just wait till the quarterly report!!!!
you say: "Everyone has know about their debt for years. YEARS. Now its a problem, when refinancing will never be easier for them. They will get a credit upgrade soon, as well, yes another one. By the time they refinance, they will use a bank this time, as you can see, the common has no more interest(it does, but thats what they will say). "
The following statement is so clueless/ignorant/stup... it's almost criminal:
"when refinancing will never be easier for them"
Right NOW is probably the MOST DIFFICULT time in the last decade to get financing. If you have no net assets (like SiriXM) it's pretty much impossible. Do you base your statement on anything real? Is it all just fantasy/wishful thinking?
And how about this one : "Everyone has know about their debt for years"
Get your head out of the sand -- SiriXM just had to borrow at freaking 16% 6 weeks ago. Expect refinancing, if at all possible, at 16% or higher in 2009. The NEW debt and these nosebleed interest rates have NOT "been known for years". The cost of credit has repriced drastically - THIS IS ALL NEW.
As far as you hanging on to the ratings: the ratings agencies don't really matter anymore -- S&P and Moody's are JOKE. SIRI is Caa2 with a **NEGATIVE watch** by Moody's -- there's 17 ratings above Caa1, and only 3 below, until you get to "D"... for Default. S&P has a similar CCC rating. Again, these ratings, and any upgrade, mean nothing. (and an "upgrade"???? what???? did you just say that? fantasy-land again?? lol.)
"They will use a bank this time [to refinance]"....
You really need to get out more. Have any idea what is happening in the financial sector? The gig is up, the "house of cards" leveraged balance sheets and bad loans are coming home to roost - banks are going out of business left and right and will continue to do so for the next year. Lehman, Merrill, you name the bank, are all borrowing for themselves at 10%+, they are barely alive... and you think they are going to extend a line-of-credit to 'never been profitable, deep in debt, slowing subscriber base' SiriXM at a level lower than 16%??? You are clueless.
If the credit market stays the way it is right now for the next year - and it very very likely will, if not worse - the 16% interest rates will be considered "cheap" financing for this company. They will essentially be shut out of the credit markets and only get financing by way of a capital raise where they give away their upside to the new investors.... massive dilution. IF the credit markets get a little better, expect those mid-teen levels for the $1bil to re-fi in 2009... that's another $150mil a year in interest payments..... on top of the the $140mil/yr they just added... on top of the other, existing debt...
The blatant disregard, and lack of understanding of the 400 lb gorilla in the room is hard to believe.... cos, you've at least considered it in your analysis... you other bulls... hard to feel sorry.
And by the way, two more things: Killerkaul, thanks for last weeks pep talk -- I guess I was having a "bad lipstick day. "
And second: Connorport, if your still with us, go to todays posting on Alpha with Tyler's, "Citi and Goldmans weigh in on Sirius; It's in regard to a question that you had for Mr. Vicar....
Scot's Slant
I thought for sure all the nay sayers, bashers, and Frauds like the Vicar would point me to the error in my ways, but they didn't. So what I forgot to do was to take into account churn rate which is running at about 325K subs a month or 3.9M per year, which pretty much makes neutral the OEM channel with my math above. The 2 Mil increase is in net subs, from retail, second chance subs, family plans and improved OEM numbers. Now I understand the conservative forecast. Just thought I'd be an honest broker here of the numbers the way they are not how I would like them to be. Let's hope now the merger is over, consumers won't be as confused when the new products and programs roll out and churn can improve.
But thats my opinion, and i'm not saying I like the stock this low, but technically I haven't lost anything! I still have all the shares I started this ordeal with, and hopefully more soon!
GOOD LUCK TO SIRI !!!
(I probably won't wake before the market opens lol, My day off... hopefully I will have a GOOD surprise waiting for me)
EXACTLY.
I guess I figured out my stand a little early so someone tell me howsmart or dumb I was.
When I bought 1000 shares at 1.36 I put a stoploss on it for 1.20 and much to my surprise it SOLD. I watched and grabbed 1000 shares again when it was at .96 and yesterday it closed at .98 after hour sales were 1.02 and when I repurched the 1000 shares it left 200.00 in my account so did I lose there?
Rev. Marshall
Rev. Marshall
but "loving" a company's service does not make it a good investment. it doesn't make it solvent either.
On Oct 03 07:51 PM snakeflake wrote:
> I just bpought 10,000 shares so when they reverse split 10:1 I will
> have 1000 shares at 65$ each.