How Sirius XM Should Handle Supply and Demand 109 comments
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It’s all about supply and demand. Always has been, always will be. That is true for Sirius XM (SIRI) stock as well. The recent sell off in SIRI shares can be attributed to supply. The abundance of available shares being sold has met with minimal buy side pressure. This has dropped the price.
A company through its effectiveness can only help to increase or decrease demand of its shares. The example staring us in the face is the recent conference call by Mel Karmazin. Unfortunately, despite many positives, the call helped to increase supply and weaken demand. I don’t think it takes a rocket scientist, or in this case an accountant, to see that the intention of the 2009, 2.0 million subscriber addition estimate by Mel was in fact just a low ball estimate, without any basis of fact. Mel even stated that the company was just basically throwing the number out there. The street however, focused its attention on that number.
Some attribute the decline to debt issues coming due next year, but the company did in fact lay out an exceptional plan to deal with the debt, without diluting shareholders. That should be looked on as a positive, yet the street is obviously nervous. Adding to that nervousness is a sub 1.00 stock price.
What can be done now? There is only one answer. The company must increase demand for its stock, by ignoring the stock. It can only do that by executing its business plan, which puts the Q4 Christmas selling season on center stage. Q4 is historically the strongest quarter for satellite radio and with the new “a la carte” packages and “best of” programming offers being launched this quarter, Q4 looks promising.
This is a new company, only 40+ days old and it should be viewed as such. It is in this quarter that the company has the best chance of increasing demand for its stock, and increasing guidance in future calls.
Investors now have an opportunity to own stock in a company, with 2-3 BILLION dollars in annual sales and GROWING, for under a buck. Are you kidding me? Oil prices are plummeting and lenders have become more liquid in recent days which should boost car sales. The potential for upside surprises from the company has never been better. I think everyone can clearly see that. If we are all aware that the estimates given for 2009 are a low-ball figure, why then place so much importance on the number?
If the company can achieve its desired cost cutting and execute on sales, the stock will rise like a phoenix from the ashes. The growth of the company is real despite many headwinds. As Jim Cramer admitted at the prompting of Mel Karmazin, there is no other stock in the sector he’d rather own. The stock will catch up, but the days of day-trading it are coming to an end, and that is good for long term investors.
Positon: Long SIRI
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This article has 109 comments:
The situation is now much more favorable to the investor. Shareholders should do just that: hold their shares. If somebody bought in at a higher share price, why bail now? The plummeting share price was to be expected and mentally prepared for in advance; otherwise why would somebody buy a speculative hi-tech stock? It was a gamble, perhaps even a long shot to buy either SIRI or XMSR when they started the ballgame. Being a high tech company doesn't automatically translate to being a highly successful company. (Think Globalstar.) I think that the investor with the intestinal fortitude to keep his/her position with SIRI will be glad that he or she did in the not too distant future.
Sometimes what happens on Wall Street doesn't seem to make much sense. The drop in PPS for SIRI is one of those things.
The above reasons by Brandon are only valid if you believe in a free market,and stocks are never manipulated. If your a realist, I will give you the real reason this stock isnt moving. I dont know the banks or hedge funds doing this, but tanking the conference call seems a little too convienent for me. Time to nail it, for the first time, and he didnt. No teaser news, like they should have done. Basically a vague plan for the future, as usual.
He makes a ridiculous argument that the sole reason for SIRI's penny stock status is a "supply and demand" imbalance, created he says by CEO statements that the subscriber growth rate is dropping, statements Mathews says were made "without any basis in fact."
Mathews apparently believes he knows more than the CEO, a belief that clearly has no basis in fact. In fact, that belief is based on nothing more than pure, unadulterated speculation by Mathews who is obviously desperate to resuscitate a dying stock and salvage what little is left of his investment on the backs of those he hopes to deceive.
Investors should avoid SIRI like the plague until the corporation shows at least 3 consecutive quarters of profit. To this moment, SiriusXM and its predecessors have NEVER made a profit despite burning countless $billions of dollars while dashing countless hopes and failing to achieve countless goals in a timely manner.
As we speak, SiriusXM finds itself in a perfect storm that could easily lead to a Chapter 11 bankruptcy filing and consequent cancellation of all common shares that presently have a significantly negative book value. This is no time to be rolling the dice on SIRI unless you can well-afford to lose your entire investment.
Readers need to bear in mind that Brandon Mathews is not a trained reporter but is, arguably, a lousy investor who finds himself stuck with a big loser in his portfolio. As he tries to convince you to join him among the ranks of long-suffering SIRI longs, just remember that misery loves company.
You are an idiot. 3 consecutive quarters of profit? LOL LOL LOL LOL
Then buy!!!! HAHAHAHAHAH
Thats funny Troll. Your the troll, what TERRIBLE advice. Everyone knows the best time to buy a stock is on the cusp of their first positive quarter, or if they can even smell it. At this price, sniffing 3 consecutive quarters of gaining on profit and seeing positive cash flow and hitting estimates or beating will be more than enough for this and all stocks to go up in value. If you waited till a stock had 3 consecutive quarters of profit, it would be WAY to late to make any sizeable gains. Nice try Troll, and dont bash Brandon for what he types, because in a free market he is correct, in a sense. I just dont believe in free markets. Nothing free in this world.
Don't confuse what you "know" with what you claim "everyone knows."
After all, it's you sitting on a losing position in SIRI that just keeps losing more every day.
So much for what you "know."
In 1959 I became a registered representative at a NYSE firm. The first month a seasoned veteran told me "never argue with the tape". The present market price, which happens to represent an exact 90 percent decline from the Nov 2004 Mel/Howard high, says it all.
Share price does not matter --somebody is still buying them....
Scot's Slant.
any comments?
Too bad you don't have any "Brains" to see that this stock is DOOMED !
Have a good day!
LOL!
Plus, cos is in a really bad mood lately cuz "163888" just broke up with him and somebody peed all over his steel-toed shoes. Geez Killer, I hope that guy doesn't live near any really tall buildings.
Mel, unless it rains tomorrow, the tee time for Shadow Isle is still on.
****I have real sources that will not fail in predicting Siri's future.
1. My Psychic told me that Siri will go up to $300. per share at the end
of the month.
2. This morning while having breakfast, I found an image of Jesus on my toast. He told me " Son buy Siri now, I will make it rise pass a buck by Christmas" ..... "Christmas 2062".
3. My DOG had a tip for me too. He said buy, buy, buy. maybe he ment dog food.
4. The homeless guy in downtwon told me Siri is a smart buy & if you have it hold on to it.
I have a feeling this will be a great stock.
Stop please.
Wow this is too much. it's crazy out here.
Look at it this way, if you are a really fat person among a room of really fat people you are the norm. until you see a room full of normal size people.
:)
www.youtube.com/watch?...
www.youtube.com/watch?...
enjoy !
:)
"not much longer cos; we're almost out of this channel formation. just keep rowing cos . . . big things are coming on October 6th . . . it says so right here in my charts"
"but Brandon, where's "163888?" when's it gonna be his turn to row?"
"sorry cos, "163888" jumped over-board; eaten by sharks . . . now shut-up and stroke . . . stroke . . . . stroke"
I just posted this at Sirius Buzz forums: Now I know some say the financing is the reason for the downturn. While that is a overhanging issue it should not be the reason for the stock being this low. The credit market stinks yes, but when a company with the metrics that are showing them to be coming out of the woods in a few more quarters, does not make sense that they will not be able to get the last piece of financing to get the rest of the way, even if the financing is not on good terms for SIRIXM. The fact is for most of the remaining financing, those people will have a choice to ether extend the terms for a few more quarters (not give them more money) or get maybe pennies on the dollar in bankrupcy court. It seems most have forgotten SIRIXM has not missed a payment yet and the possiblity of them missing one will get less in short order.
So in conclusion, I do not know why the PPS is not where it should be. I am not a big believer in conspiratorial stock manipulation, but I am getting there. I am not saying the PPS should be 4 or 5, or even 3 at this point, but 1 and under, that is just ridiculous. When have you ever seen a stock with a almost proven brite near future as SIRIXM has as low as SIRIXM is today. That is frustrating, but remember this it is not reasonable and not something that can be justified for to much longer.
Then what would explain the volume the past few weeks surging over 100M and the price dropping? Today is mostly stable in a choppy market and volume is back near historical premerger norm?
looks like a rainout Mel . . . play 36 on Monday?
Instead you sit back and make personal attacks on others opinions. You are sad, pathetic individuals that troll the boards with your negative BS. You never talk about your stock picking success or even if your investments in the market. You are parasites living off of other peoples adventure. How sad it must be to sit in your room wishing you had a life for if this is your entertainment you are truly lost.
What a bunch of wet blankets.
You people take this way too serious.
Yes I do have other investments;
I bought LULU @ 19.20 sold at 31.10
bought BAC when it bottomed @ 18.50 sold at 32.13
Bought TASR @ 9.15 sold at 17.56 , before it dropped
Bought HAS @ 23.46 sold at 29.10.
My mistake was WCI Bought at 9.21 sold at 5.10 now at .17
and yes I did own Siri on and off made money on it , as you know.
But will not get back into siri.
rational one, I was with you on the 50% penetration and 4 million new subscribers on an earlier post until 163888 pointed out to me, correctly so, that monthly churn even at an average of 1.67% is 325K subs per month dropping off. I reviewed the most recent 10Q and found it to be pretty accurate. That's a churn of 3.9 M to be made up under current conditions.
....actually, it IS:
Wall Street Journal 9/12:
Clear Channel Bonds Attract Few Buyers
By CYNTHIA KOONS
September 12, 2008; Page C2
Underwriters sold $228 million of Clear Channel Communications Inc.'s bonds, ******less than a quarter of the amount the banks hoped to offload when they brought the deal to the market last week.******
The debt sold at 70 cents on the dollar, a steep discount for a bond sale even in this dismal environment for risky credit. The bonds were trading below that price, at around 68 cents on the dollar, after the sale, showing just how little appetite there is for risky bonds and leveraged-buyout debt more than one year into the credit crisis.
Banks still are holding about $48 billion of LBO debt, according to Standard & Poor's Leveraged Commentary & Data unit. That backlog, down from around $325 billion at the height of the credit crunch, has been a headache for underwriters because much of that debt is for the LBOs that were done during the boom of 2006 and early 2007.
The Clear Channel bonds, which converted from a bridge loan used to fund the radio company's $17.9 billion leveraged buyout, come with a coupon of 10.75%. ******The low selling price means the debt is yielding 18%.****** It also means, excluding fee income from the deal, a loss of around $68.4 million for the group of banks underwriting it.
Thank You !
: )
My strategy has been very simplistic. So simple in fact, it's scary !
1. I look for companies with good balance sheets & history.
2. I put them on my watch list for a few months.
3. If the company does well I make a note of it.
4. wait till the DJIA, NASDAQ, S&P 500 to drop a few hundred points
driving the stocks down.
5. BUY on the low, wait till the market to recover driving the stock up &
SELL!
I know it's utterly simplistic, but for it has worked for me so far.
I never fall in love with a company. Too risky!
To me a stock is like a woman, You get what you need and get out!
LOL!
Chapter 11: Comments are from, I actually might be very close here, from a 15 year old? How far off was I, dude. JSWEDE tries to throw facts at me, but they are misleading and slanted, and usually have nothing to do with topic.
1 billion is not a lot if your getting back 130 million of it a year. Remember, its paper money, it has no value. They move money around to make money. If you can get 13% in this day an age, you take it.
I will list a few points why I know Sirius isnt going bankrupt.
Points of interest(facts, you know those things all trolls on here hate).
1. Apollo group has an excellent credit rating, and has received billions in loans in the near past. They have financed(along with a few other institutions) cash flow problems with Sirius in the past.
2. Jesse Jackson. He got his channels on Sirius. He is a freemason, and one of the more influential people in this country. He wants his guys in control of those stations. Look up what it means to be a freemason, and you will shut up.
3. More bandwidth of tv.
4. BEST medium for song downloading(speed) songs.
5. Existing debt holders want their money. Its the loan me another 10 dollars so I can make your 100 dollars back I owe you. Dont, and you get nothing.
5. GS, the most evil and manipulative bank in existance says sell.
6. No place for talent to go with those salaries. Howard, Opra, Sports Leagues LOVE being on their. They CHOOSE to promote their products on satellite radio or terrestrial radio. More money in Sattellite. Hey NFL, would you like to keep your overpriced contract? Yes. Give me a few million. Ok. etc...
7. All executives are in for a very low stock price. It would be stupid to not allow at least one post merger run up to get some juice out of it.
8. CCC went private in fear of this company. Their main competitor its declining, satellite is expanding.
Common reasons Sirius wont work long term.
1. Internet radio. To be honest, trolls, this one is so redementary, and obvious, I wont even bother. Do some research on this topic, and get the info yourself. For all neutrals out there, just take my word for it on this one.
2. HD radio. Its being marketed by terristrial radio. They went private to avoid embarressement. Nuf said.
3. IPod. No content. It takes some business, I would have to agree, but its not much. I'll give it less than 1 percent. If Ipods disappeared tomorrow, Sirius would get like 5 new subs.
4. Wont get refianancing. Dont need it, they WANT IT. They can further dilute, get institutional owners like Apollo to bankroll them AGAIN, turn to private sector(non banks) or use cash on hand. They will have more cash on hand than Mel admits too by the end of the year.
5. Car sales are slumping. But used cars arent, and if you have the radio in the car already, why not sign up and try it out. New car penetration actually advanced on the lose of cars sold. So its a positive.
All troll lies will be dealt with as they surface. No lie will go unanswered.
At this point, I don't think brains versus the other part of the male anatomy makes for a good argument; In fact, I think your argument is flawed. If we listened to your advice and sold, than that would guarantee a loss. However, if we hold, this leaves the door open where in the event that stock price recovers, we will at least break even or profit. This is not "balls" my friend, this is simple logic that requires the use of what we call a "brain." In other words, panic is not the name of the game -- if someone yells fire, it is the people who panic that perish....
And by the way, there is one more thing: Mr. C11, why would you use the term "balls"?
It sounds so elementary school.
Nuts, nards and gonads have a friendlier sounding ring .....
Scot's Slant
I own 35000 shares at 2.35.
And I sleep very good at night. I have bought no shares under 1.82. Why? Cause my personal allotment for specs has been spent. I spend not one dollar over that. If it goes to 0, it had better. Cause if it doesnt, its going to 20. You understand why? If you dont, then you dont know the spec stock game. You get rich or poor in most spec cases like this one. Since you own no shares, your opinions are confusing and one must question your reasons. Ive stated my reasons. What are your reasons for posting?
CCU and SiriXM are not identical, and it's more of a coincidence they are both broadcasters - I showed the story b/c I thought it relevant and timely.
All companies and credits are different, but consider the similarities:
* CCU is Caa1 / CCC+ rated
* SIRI is Caa1(negative watch) / CCC rated
* both are/were/will be trying to raise $1bil in this market
Some differences:
* CCU is/has been making money for a long time; averaging about $6bil+ in revenue and $2bil+ in EBITDA for the last 5 years.
* CCU has Assets of of $18bil and Liabilities of $9bil for a total shareholders equity of ~$9bil
* SiriXM has never made money; and projections are for ~$2bil+ next year and another loss of around $300mil EBITDA
* SiriXM has Assets of $10.5bil and Liabilities of $6bil, for $4.5bil in shareholders equity.
(*********IMPORTANT footnote: $5bil of those assets are "goodwill".... so without some rosy estimates of value of the brand etc by Mel, SiriXM has negative shareholders equity - just like both Siri and XM were before the merger. Institutional bond investors know that their final recourse is claims on assets - they not fooled by goodwill -- they will give that a sizeable haircut....)
So, again, I am trying to let some of you equity guys know that when you say "Mel has already worked out the financing" and "it won't be a problem" and "that's why the credit markets exist!".... you are both uninformed and dead wrong.
I was on the fence before, but I'll now predict that they will not - no way no how - get the financing, even at 18%+.
I think this company will survive though, by way of a capital infusion which gives away virtually all upside to the new investors. Common shareholders left with shares worth virtually nothing.
I hate it when the bad guy sounds smart.........
Why isn't he right????
1. It creates demand for the stock the lower it goes, BEFORE it goes up.
2. They paid for the merger with YOUR stock value lost. Excellent plan for the timing, still stock value at 2.75, etc.. No cost to Sirius(money wise).
Allows investment institutions excellent buy in points.
3. Banks worried(but not really thats my point, its the excuse they used for you to buy the price drop) that a merger appeal would drag merger. Sept. 4th was the date, and that passed. Plus, there was initial confusion of synergies, etc.. They used the fear of the unknown.
4. Banks would much rather loan to a combined Sirius/XM(notice most the debt is the crappier XM's) than to either or.
5. Banks get ample time to access sucess of best of packages, fix balance sheets, etc... More time to see the combined companies in action the better.
6. Too much big money being SPENT by Sirius that is UNREPLACEABLE if they went under. Big money in media is from pay per view, listen, etc.. services. Why isnt the NFL football packages on cable? DirectTV paid more, thats why. Terrestrial radio cant pay the NFL, Howard, Oprah,etc.. anywhere near what Sirius can. Its in all those parties best interest(no cash flow interuptions) for them to succeed, with this current management and structure.
Troll Lies I will not allow
1. "SiriXM has never made money; and projections are for ~$2bil+ next year and another loss of around $300mil EBITDA".....
Thats a lie. The real figure is next year POSITIVE 300 million. This is such a low ball figure, its actually(technically) almost a lie. Its not only an understated amount, its bare bones.
2."CCU is Caa1 / CCC+ rated
* SIRI is Caa1(negative watch) / CCC rated
* both are/were/will be trying to raise $1bil in this market"
They were upgraded to this level, with a watch for an INCREASE. There are not getting a credit upgrade, and then put on watch for it to be lower right back. LOL This troll wants you to think that is true. Sirius has never missed a payment. That rating is only due to the speculation in the industry itself, not their cash flow.
3.
"* SiriXM has Assets of $10.5bil and Liabilities of $6bil, for $4.5bil in shareholders equity."....
Thats accurate. Goodwill? No sir, that was barebone estimating the value of XM. It really has more value combined with Sirius than solo(better management, better access to capital, synergies to come(do you really think the NFL, Howard, etc... will get the same money next time with no competing medium other than a failing terristrial radio model? I didnt think you thought that.) These synergies are actually the TRUE synergies of this company, and have gone untapped. The signing of the Mad Russo guy was was lower than it would have cost them if both companies in the past had wanted him. XM drove up the bid on Sirius on purpose, knowing they wouldnt probably get him. Probably added 20-30 percent to his salary.
4. Most of Sirius and XM losses for the year are pre merger. Post merger their cash flow is improving right now. Their cash flow by the March refinancing will be much better to show creditors. How many companies going to borrow 1 billion dollars actually have 300 million in cash on hand? Id bet it will be more like 400 million by March.
And the last reason that you need not worry about them getting refiancing.
Banks dont lend to banks right now sometimes because banks are negative cash flow, their losing more money than Sirius is. AMD received funds from foreign investors, they have so many dollars to throw at anything that looks even somewhat attractive in the US(trying to find a money making model for dollars(about a thousand foreign institutions wondering how they can make their falling dollars make 8 percent at least. Sirius has the ability to pay back loans. Banks dont right now, lol. Ironically, banks have money, but wont part with it unless they feel they will get it back. They KNOW they will get it back with Sirius, if they just get the money.
The current management team has been offered the right to stay, or receive big bonuses if the cooperate with someone trying to buy them out. Someone wanting to buy them right now would have to pay off existing debt too. Now, assuming their is a company out their that didnt mind taking on their debt(ton of companies that could pay it off with cash on hand), then the goal before the sale would be to drop the price so low its affordable. Heres the problem with that. Heres why it wont happen.
This stock is 85 percent float. To acquire enough shares on the open market would raise the price A LOT!!!. Current shareholders would never vote for a low ball price. Now if the buyer can quietly acquire enough shares (probably require around 1 billion shares) I would be amazed.
If Mel sold the company for $1 a share, their would be a shareholder vote to remove the board faster than you would believe. Share holders wouldnt accept less than 3 dollars a share, Im sure. So anyone who bought in lower than that would be fine.
"1. "SiriXM has never made money; and projections are for ~$2bil+ next year and another loss of around $300mil EBITDA".....
Thats a lie. The real figure is next year POSITIVE 300 million. This is such a low ball figure, its actually(technically) almost a lie. Its not only an understated amount, its bare bones. "
>>> you are right Relmor - I meant for -$300mil for the year ending 2008 (that would be reported early next year). Of course, none of their figures for EBITDA take into account new debt service costs, which are ~$140mil on the new debt from July ALONE.
"2."CCU is Caa1 / CCC+ rated
* SIRI is Caa1(negative watch) / CCC rated
* both are/were/will be trying to raise $1bil in this market"
They were upgraded to this level, with a watch for an INCREASE. "
>>>> according to bloomberg, they are still on NEG watch as of 7/23/08. That looks to be not up to date, as I checked other sources and they, in fact, are Caa1 without "watch". No "positive watch", either though, just straight Caa1.
""* SiriXM has Assets of $10.5bil and Liabilities of $6bil, for $4.5bil in shareholders equity."....
Thats accurate. Goodwill? No sir, that was barebone estimating the value of XM. It really has more value combined with Sirius than solo(better management, better access to capital, synergies to come(do you really think the NFL, Howard, etc..."
>>>> what you wrote above is pretty much the definition of goodwill. Point is that bond investors want hard assets to lay claim on.
" How many companies going to borrow 1 billion dollars actually have 300 million in cash on hand? Id bet it will be more like 400 million by March. "
>>> you can take any little piece of the balance sheet and pull it out to say whatever you want -- you know you have to look at the entire picture. you say they have "$300mil in cash"? ok, I'll point you to the $585mil in accounts payable. poof - cash gone.
"AMD is LOSING MONEY, and still got a 300 million dollar loan. "
>>> ok, I'll use your logic: AMD has $1.4bil in cash in its balance sheet.
Further, they used to make money, up until 06, and whomever lent them the money likely sees a quick fix with a relatively small $300mil loan.
and finally.... re-read the Clear Channel story I posted above. They tried to place close to $1bil at freaking 18%.... they got LESS that 1/4 of that. There IS NO MONEY. The fact that a "tiny" $1bil can't be placed at 18%+ is enough for me to see SiriXM won't be able to do traditional financing -- if they could get it, 18% would kill them anyway.
The US banks and investors are not in a loaning mood. and Europe? North America has, so far, written down $260mil from bad loans. you think the money's coming from Europe? Europe wrote down $230bil. Relatively speaking they may be in worse shape.
"Geez , even a dog like Lehman Brothers will their toxic balance sheet ALMOST found a buyer from the Koreans. Ill bet those same Koreans would much rather throw money at Sirius than Lehman Brothers lol. "
>>>> you'll see tomorrow when the terms come up for the Lehman deal -- pretend your Siri stock is LEH stock and see if you like the results. KDB wasn't trying to save any Lehman shareholders.. "lol". and they'll get no mercy tomorrow either.
Further, KDB is trying to make a global presence in banking, their business. Not looking for stock investments.
Clear Channel couldnt get a loan to save its life right now, there a failed buisness model set up 100 percent on advertisers, and a growing populace that hates the product. Nice try, but try again. You both arent very challenging at all.
AMD(bankrupcy rumors are a daily part of that companies exisitance. ) They need more cash on hand, because they spend much more. Thank you, and their acounts payable is rather large as well.
And thanks for acknowledging your lie, that they are on credit watch, for a change, up or down, ok, like they would raise it then lower it a month later. You are so easy, please give me more lies.
As for available financing, you dont understand what is happening to the dollar right now, do you? This surge is a manufactured intervention on the largest scale ever concocted. THe dollar is going down, and there are trillions looking for homes. TRILLIANS. They will find a MERE $1 billion of those dollars. Its simple math. The demand for that money in GOOD investments is limited. Sirius, with money to sustain, its a GREAT investment, or you dont understand the company. Go post on companies you understand, like WalMart. Thats easy one for you. Im sure they have a blog somewhere you can whine on.
very very telling that you hang your rebuttal on a "positive watch" or "neg watch" of their credit rating that is on rung 17 of a possible 20 before default... as I've mentioned before, the rating agencies' opinions are tantamount to nothing in the world of credit these days...
you said before "it's not like they've defaulted before.... well they are 3 rungs from that dreaded "D" rating...
killerkaul, the "TRIALIANS" relmor types I hope answers your question.......
it's clear, to me, that relmor "knows" a lot if tidbits about the market... things he's learned over the course of time reading about finance... but it should be clear with anyone with any type of education in this area, that he's lacks fundamentals. the scatterbrain responses and swiftly moving the argument to areas he has anecdotes about should tell you that.
I bet that his approach may well have made him money in his career (and kudos for many great points in the last months), but in this case he's grasping at straws, refusing to acknowledge the aforementioned 400lb gorilla...
Said differently, this company is hitting a wall - the credit markets - and he has no idea.
>>> selling $238mil out of $980mil is "almost pulling it off"??????
Goodwill will be debated for years, but is irrelevant to the long term and short term success of Satellite Radio. I don't know Clear Channel's numbers on goodwill but they are surely substantial and also supporting there balance sheet.
In addition Clear Channel, in taking the company private and putting parts of the company for sale since 2006, have shown investors their weak market position. I am sure looking into the effect of their Goodwill numbers would be an eye opening experience. They fought the merger because they new how damaging Sat Rad would be. Using the millions of dollars poured into their NAB lobby, they failed and are now looking to go private.
In taking it private they are also taking the company underground, away from the scrutiny of the public eye and regulatory oversight. This is why raising money is difficult for them as proved by this unsuccessful and costly offering for their bonds. This is clearly not an apples to apples comparison of two companies in the same sector. Their environments and maturity of business models are completely different. Clear Channel is the waning technology and audio entertainment deliver service, while Sat Rad is the emerging median for preferred premier audio content. "The setting of one day and the dawning of new one". Circle of Life Sh*t.
When you have too much credit they have to chase bad investments. Not enough good solid investments for a "normal" flow of credit environment to support all business's, it is impossible. So when credit shrinks, the marginal stories, the bad companies, and the poor business models suffer the most, i.e.e Fannie Mae, no bigger terrible bad business model in existance. Etc..... Clear Channel, is another good example of a bad business model. Those companies will be denied loans, Sirius will not. Like I said before, to finance the merger Mel got EXACTLY the financing he wanted. He paid for the merger with YOUR money. Not the companies. Now that that was done, he will move on his terms. The price is where he wanted it, to where the banks and the investments companies get a nice buy in point, from your sold shares. Thanks. Now what the news start flowing, the quarters being beat, and the shorts running for cover. And then even you will go away. Then and only then, will I go away.
When you have too much credit they have to chase bad investments. Not enough good solid investments for a "normal" flow of credit environment to support all business's, it is impossible. So when credit shrinks, the marginal stories, the bad companies, and the poor business models suffer the most, i.e.e Fannie Mae, no bigger terrible bad business model in existance. Etc..... Clear Channel, is another good example of a bad business model. Those companies will be denied loans, Sirius will not. Like I said before, to finance the merger Mel got EXACTLY the financing he wanted. He paid for the merger with YOUR money. Not the companies. Now that that was done, he will move on his terms. The price is where he wanted it, to where the banks and the investments companies get a nice buy in point, from your sold shares. Thanks. Now what the news start flowing, the quarters being beat, and the shorts running for cover. And then even you will go away. Then and only then, will I go away.
www.bloomberg.com/apps...
excerpts from the story:
Aug. 15 (Bloomberg) -- Sirius XM Radio Inc. struck an ``ugly'' debt deal to close the merger of the only two U.S. satellite radio operators, Chief Executive Officer Mel Karmazin said....
....``I hated it,'' the 64-year-old CEO said in an interview yesterday in New York. ``It was unfortunate, but we did it.''....
....Karmazin didn't seek refinancing until he was sure U.S. regulators would approve the takeover.
``If the merger didn't happen, we didn't want to do anything in the market,'' Karmazin said.....
....``The market on Monday was very ugly,'' Karmazin said. ``The book was not looking good.'' He took the deal.....
and the market is worse, much worse, and getting worse, since then...
oil will be back down to at worst $70 by the end of the year, car sales will be great in feb, and our great SIRI will be looking at around $4.00 and on the move higher. Settlement will be satisfied, i forsee a great close to this last quarter because it has to, hopefully all the loser financials that are going to die, will have died by then, and we will be on the road to nothing but recovery...it will be noticeable around feb. the stock will until around the end of nov, stay at the $1.50-$2.00 range, then through dec, steadily increase. Price cuts of about $2.00, hopefully, they will wise up and add more local or regional channels (much like the weather channels are) and hopefully, more simulcasts. what would have been great, is if during this hurricane ike, if there were regional/local in larger markets(houston would have been a larger market) they had a channel, so that information would be easier to get...you may not have power, but you can go to your car and hear what you need to with no problem.
if mel were a smart man, he'd be reading! but unfortunately, he's an idiot!
"Ya, were really excited about screwing over the common stockholders to pay for this merger. We gave the shorts exactly what they needed to keep the stock down for a while. And a ton of people are going to lose all their shares with a margin call. Ya WE LOVE IT. PEACE!!!"
relmor, as you can see I agree with alot about it not being alot of money. I do however disagree with this statement you made:
Common reasons Sirius wont work long term.
1. Internet radio. To be honest, trolls, this one is so redementary, and obvious, I wont even bother. Do some research on this topic, and get the info yourself. For all neutrals out there, just take my word for it on this one.
First of all I have said many times and given many reasons that internet radio will never be real competetion for satellite radio. Those that have been here now know what I have said is correct if they have been looking at Pandora's fate. It gos directly to one of the main reason I have given, royalties being to high for them to stay in business. While it was not Pandora saying it a year ago, it was the internet radio companies that were saying it, so what do you think is going to happen to them now. I also believe royalties are the reason you dont have SIRIXM entering the game of internet to the extent many think they should. I think it is a good practice for them to only be in as much as they are.
All, I have gotten into the habit of classifying longs and shorts on this and other blogs. It's almost like what's happening to the SP--every time a long contributes and short counters. As a long, I can't wait for the post-merger smoke to clear, for the company to get its legs, and for shorts to cover en masse to save their as*es.