Slow Car Sales Mean More Bad News for Satellite Radio 43 comments
-
Font Size:
-
Print
- TweetThis
It is hard to believe, but then again it isn’t. It appears that once again car sales are down. In most years, the entry of Fall means that there are car deals everywhere as dealerships try to sell off the remaining this year's models to make room for next year's. This year, the situation differed greatly. Auto makers have cut production, closed plants, and have inventory that simply does not warrant a huge sale. The customers that do come to shop are having an increasingly difficult time getting their financing, and thus many are simply opting to hold onto their existing wheels.
For satellite radio watchers, the slumping car sales is simply another negative piece of news on the stock. Yes, the penetration rate of installations is increasing, but month after month sales continue to decline. Because the OEM channel is the subscriber driver for SDARS, there is a direct correlation between auto sales and the number of subscribers announced in any given quarter. Poor auto sales means fewer subscribers trying out the product.
On the positive side, self pay churn for satellite radio has been stable throughout these tougher economic times. People are feeling financial strain, but they seem to be maintaining satellite radio subscriptions at a pace that equates to past experiences.
While not all manufacturers have given numbers as yet, a few have:
Nissan (NSANY) - Down 37%
Ford (F) - Down 35%
Toyota (TM) - Down 32%
Honda (HMC) - Down 24%
GM (GM) - Down 16%
With disappointing numbers well into the double digits, it is little surprise that the overall perception of the economy is not good. In the near term, the auto sector may not see a decent recovery until 2009, and even then, it is a question of how long that recovery will take. Satellite radios will continue to be installed, and subscribers will continue to sign up, but the rate is slowing, and the situation with new car sales does not help matters.
Sirius Buzz will publish our monthly sales report as soon as all data is available.
Position - Long SIRI, No Position OEMs
Related Articles
|
Find People on SA
-
The Seeking Alpha 100
See allThe top 100 stock
market authors
selected for publication
Seeking Alpha 100 » -
Fastest Climbers
Authors with the largest
increase in followers
in the last 7 days-
1
David Fry
-
2
Philip Davis
-
3
Bill Gross
-
4
Tyler Durden
-
5
TraderMark
Fastest Climbers » -
1
-
Top Commenters
Top commenters,See all
as ranked by their peers
Top Commenters » -
Top Instabloggers
The 100 most activeSee all
Instabloggers.
Top Instabloggers » -
Top StockTalkers
TopSee all
StockTalkers.
Top StockTalkers »
This article has 43 comments:
I really hope you guys took my advice in the previous article and sold SIRI and bought NCC. SIRI is going nowhere for the next 6 months. There is a real downside potential of loss of revenue from current $20 subscribers downgrading to a la carte programming at $6. And an equity offering will dillute shares further.
NCC is on a rocket. It went from 2.05 to a high of 3.14, just as I said it would do 2 days ago. It is now at 2.78 in after hours and is still a screaming buy. I am up 185% on NCC in 2 days. One more day and I cover all my SIRI losses. I think it goes past 3.50 tomorrow. Get in while you can. Then come back to SIRI later and double up at the end of the year if there is some good news by then, which I doubt.
I left you a comment on the other page....
You don't know what the outcome will be tonight.
ARMOR FOR SLEEP ~~~
From the song ~~~~ End Of The World (You guys should listen to it)
I wanna stay at home for the end of the world
Falling asleep when they're dropping the bomb.
This is all a dream,
That's what I'll be singing.
1.) First line is when SIRI announces the refinance, It will be the end of the world for the people who abandoned ship. I'll be home for that!
2.) Second line is explaining how I will be falling asleep easily when Captain Mel drops that bomb.
3.) This will be a dream come true.
4.) All this is what ill be singing!
Great song, the rest of it's good to you guys should take a listen
Both Tyler and Brandon have been slightly negative lately and the Street dot com is positive? WTF? Lol.
www.metacafe.com/watch.../
iF YOU already have a subscription to sirius then omit this..
EVERYONE JUST BUY A SUB TO SIRIUS! THEY HAVE CHEAP PACKAGES OUT NOW!! HELP THEIR SUB COUNT! TELL ALL YOUR FRIENDS ADVERTISE FOR THEM! IM DOWN 60K IN THIS SIRI SHITTY STOCK! iM HOPIN IT WILL GO UP! DO WHAT YOU CAN TO RECOVER YOUR LOSS!
iF YOU already have a subscription to sirius then omit this..
EVERYONE JUST BUY A SUB TO SIRIUS! THEY HAVE CHEAP PACKAGES OUT NOW!! HELP THEIR SUB COUNT! TELL ALL YOUR FRIENDS ADVERTISE FOR THEM! IM DOWN 60K IN THIS SIRI SHITTY STOCK! iM HOPIN IT WILL GO UP! DO WHAT YOU CAN TO RECOVER YOUR LOSS!
well
CITI and Barclays both upgraded their outlooks for SIRI.
And plus SIRI doesn't have the entire weight of the Financial market on it.
So good thing you jumped ship into that incredibly volatile market.
SWEET!
I'm Praying for you on that vote today man..... Good LUCK
Look, the subscription downgrades to $6 a la carte could kill SIRI for the next 2 years. Isn't that what you would do if you were not a stockholder?
Then go to the NCC posts and write your super comments there bud....
I watched level ll trading between 10 & 11:15 am. and couldn't believe how big blocks from Arca and Cinn were capping prices at whole cent increments. They hit the board and were gone whenever they needed to keep the stock trading between .61 and .66 all through the morning. They big blocks were there like road blocks to what was available to the bid and just in front / below the ask. It was and has been amazing to watch. The interesting thing is the blocks were there on the downside today too.
But do you think you can comment on my last comment please man...
For those folks, does it matter what the monthly rate is...why not give them 3 free months for a years sub?
There has to be a ton of these radios out there, both in cars, in drawers, sitting on a shelf...heck they are next to nothing on ebay. Why not tap that?
Thanks for the insight cos
Midas well start wiping our asses with dollar bills because that's all our money will be worth....
woot
I tried to help you guys because I helped put you in this hole with 6 articles praising SIRI on SA. I am a believer in SIRI long term and will be back when the price is right. I dumped 28,400 shares of SIRI to buy14,400 NCC at 1.50. It's now at 3.10 in after hours trading. I'm up 23 K now with more to come tomorrow. And the Senate passed that lousy bill. See my article at:
seekingalpha.com/artic...
Senator Shelby's office called me to clarify that he was not the sponsor of the bill. Seems he has had a lot of calls about that article and has even quoted from it on TV.
NCC should rocket tomorrow. SIRI should go up too. I don't mean to rub it in , as the Vicar would, but I will recover all of my SIRI losses in 4 days.
I'll be out of NCC on Thursday because I would not hold it on Friday or Monday , when the Feds takover banks.
You seem like you know whats going on more than I do, along with cos, 16388, killer, sl62, relmor, and the rest i forgot....
Do you guys think this bill will affect the chances of SIRI refinancing??
If so when ?
Ok, well that sounds about right....
Thanks
Plan B: The Mortgage Investment Bill
for Reviving the Economy
by Stan Muse
The Federal Reserve is out of Federal Funds rate options and now the Congress is about to pass legislation which will be the largest bailout bill in the history of the world. Fannie Mae and Freddie Mac are now penny stocks with perhaps over 1000 bank failures yet to come. The American taxpayer will be told that they and their children will be writing big checks to rescue the Wall Street crooks and congressmen that caused all the problems, while receiving nothing in return.
Anyone who has been following recent congressional hearings knows by now that this is unacceptable to Main Street, the voters who will be firing their congressmen for turning the USA into a socialist country. It is also widely believed that this bailout bill may not be embraced by Wall Street because of its onerous terms even if passed. Finally, it will not provide sufficient liquidity for improving the rest of the economy.
A much more effective and fairer way to end our economic crisis is easily attainable. To state it simply, all Congress has to do is to pass a Mortgage Investment bill which allows individuals a one-time option to use some of the funds in their IRAs to pay off their mortgage balance in full, without any penalty, interest, or taxes for doing so. In return, individuals choosing to exercise this option give up their mortgage interest tax deduction for life. This bill could be passed quickly and independently of any other economy-related legislation currently being debated, or included in the current bill. Individuals choosing this option would need sufficient IRA funds to pay mortgage balance in full. The actual payment to the individual’s mortgage company would be done by the IRA managing institution to avoid fraud.
As one senator recently stated, ‘for most people their home is their IRA’. For many others, their 401-K plans hold many trillions of dollars, much of which by now is parked in money market funds or T-bills as mine is. If these IRA funds could be released to pay off mortgages, we could possibly avert, or at least significantly shorten, the economic recession we now find ourselves in. In fact, no other bailout legislation may even be necessary, although more regulatory legislation is certainly needed.
I asked Allan Meltzer, Arthur Segel, and Ellen Zentner to review this proposal and received some positive responses. Ellen said it seemed to be fool-proof and better than a reverse mortgage. In fact, it is a no-brainer for the homeowner with a large 401-K balance, and for the government. The only people who might object, as Ellen stated, are the bankers who want to keep homeowners dependant on them, especially those in the upper-income group. But even the bankers can not want the government to own a large stake in their business for a multitude of reasons.
It makes sense to allow people to use their IRA money, which they earned, to invest in the best and safest investment they could ever make, their home. Presumably they will need a place to live in retirement on a fixed income. It makes no sense for someone with more than enough IRA funds to cover their mortgage balance to loose their home because they lost their job and can not pay their mortgage. It also makes sense because it is not some form of government bailout which rewards the bad behavior of mortgage companies and unqualified borrowers. Instead, it rewards the good behavior of those who have saved and invested in the economy
If only 5 million people chose this option, for an average of only $200,000 each, the result would be $1 Trillion in paid-off mortgages, providing liquidity to the mortgage industry. By executing the option, an individual’s annual mortgage payment would become disposable income to put back into the economy or back into IRA accounts. To the individual, the effect is the same as lowering taxes. If only 5 Million people were able to put back $20,000 per year into the economy, the result would be a $100 Billion per year stimulus package for many years to come.
In my case, with $800K in IRAs and a secure pension, I would increase disposable income by $1600 per month while reducing the IRA balance by only $160K, but saving over $120K in future interest payments. I could retire, which I can not afford to now, and leave my six figure job to someone else. I could also quickly replenish the IRA money used to pay off my mortgage with the extra income.
Adding a further provision to delay receiving Social Security payments for a year in order to exercise the option would be a baby step towards privatization of Social Security. Anyone financially able to exercise the option should be able to delay the payments. For every 5 million people choosing the option, approximately $100 Billion would remain in the Social Security fund. This could fix our problems with Social Security for good.
Some of the benefits of this plan would be to:
• Immediately increase an individual’s or married couple’s disposable income by tens of thousands of dollars each year while enabling them to become debt free, helping families to stay together
• Save homeowners hundreds of thousands of dollars in mortgage interest payments
• Encourage individual IRA savings by many who have never saved
• Allow many people to retire earlier than they otherwise could
• Create demand for housing, reducing inventory, and stopping the decline in home prices
• Stimulate the overall economy, creating and saving jobs
• Not cost the government anything, and actually Increase federal, state, and local tax revenues by eliminating individual mortgage interest tax deductions, without raising tax rates
• Force the banks to sell their good loan assets to cover their bad loan losses, instead of forcing the taxpayer to buy their worst loans, and increase liquidity for new loans to those who need them
• Allow the free market economy to work through the crisis rather than resorting to socialism
• Not increase the national debt nor the money supply as a bailout would do and contribute to inflation
• Allow the individual home owner to the freedom to become their own banker with the money they earn, reducing America’s dependence on bankers, and changing America from renters and borrowers to homeowners and savers
The merits of this simple plan, the Mortgage Investment bill, for saving the economy, instead of trillions of dollars for a Wall Street bailout which will socialize the finance industry, are obvious and would benefit everyone involved. The individual gets more disposable income and a chance to live debt free, the capital markets get needed liquidity, the government collects more taxes and collects them sooner at the expense of the bankers, the housing market gets more demand, and the general economy gets a much needed boost for the next few years.
Democrats should like this plan because they can claim that it lets the wealthy pay for this mess. Republicans should like it because it increases disposable income, which has the same effect the same lowering taxes. The average voter should like it because it addresses all segments of the economy with a huge economic stimulus package, not just Wall Street, and costs nothing while helping to pay off the national debt and potentially fixing Social Security.